anna: terror strikes london. prime minister may says parliament will meet as normal after a suspected islamist extremist killed before and injured many at westminster. matt: the global selloff. investors wait -- a weight of verdict. anna: the ecb takes one more step toward exiting. how big will demand be? ♪ anna: a very warm welcome to bloomberg daybreak, our flagship morning show here in the city of

london. matt: i am matt miller dropping in for a couple of days to keep you company. have you here in london. we are going to talk more about the general state of the market, what trump is doing on capitol hill and what that tells us about his ability to pass legislation. let's rely, we saw yesterday around london and westminster and the lack of reaction in equity markets and markets in general. this is the ftse 100 standing firm, facing down against that terror threat. we saw at around 2:45 p.m. yesterday london time the first news coming through of the attack and westminster -- and westminster. it took some time to regain lost ground. facing down that terrorist threat. the equity market, the sell off easing a little bit as we work to see what president trump can deliver. matt: congress will vote on the health care bill later and

investors are holding off on making any bets until they see about the mandate of president trump on capitol hill. let's take a look at the other asset classes. we did see some resilience yesterday and here you can see that the british pound sterling coming back up a little bit 124.87.most 21 25, the u.s. 10 year chains, we did see the yields drop for three days in a row. yesterday a little changed, 2.41% and nymex crude a little bit of a recovery back above 48. at 48 .41. anna: there's that sense of pausing waiting to see how the vote goes in washington reflected perhaps what we saw in currency markets and the yen having a seventh day rally. there are partial results. that is what we have got at the close of the session in japan. of 1%.kei to 25 up by .2

the nymex was down. matt: a little bit of a resilience out of asia. that's get the bloomberg first word news and for that we go to juliet solly. juliette: the european central bank is about to give lenders a last offer of free long-term cash. -- refinancing operation rates start at zero and could go lower. in return you will get a sense of any concern over the outlook for its extraordinary stimulus as the economic recovery spurred calls for in a plan. in the u.s. the fbi reportedly has information indicating president trump's associates communicated with suspected russian operatives to possibly coordinate release of information damaging to hillary clinton's campaign. partly what fbi director james comey was referring to

when he told congress that he -- his agency is investigating trump campaign hice russia. the white house and fbi did not comment on the report. the republican head of the house intelligence committee has offered support to donald trump's claims that trump tower was wiretapped. saying that the intelligence community has collected multiple conversations involving members of trump's transition team during legal surveillance of foreign targets after he was elected. trump told reporters "i somewhat do feel vindicated by the latest developments." in japan, the head of an educational foundation is the center of a real estate scandal, telling parliament he received a donation from prime minister shenzhen lobbied by his wife. speaking under oath, he said handed an envelope containing $9,000 during a visit to a kindergarten operated by

the nationalist group. a spokesman has denied the allegation. china's permit has told a story out -- australian lawmakers his country wants peace and stability to boost economic growth. he says pieces china's tradition and it does not seek to dominate. he said was countries should stand together against protectionism. let's check in on the markets across the asia region. seen a close out on the nikkei around .2 of 1%. it was a bit of a choppy session coming through in that region but also the hang seng index flat in late trade giving up some of its earlier gains. the a sx 200 and will come up i .4 of 1% as a result of rebound coming through in commodity prices which gave us solid boost and generally the risk aversion sentiment did fade away after that weakness that we saw across the region yesterday. you also had safe haven assets being dumped.

the yen and gold lower. in terms of stocks we're watching in the region, tencent coming through after the bell with its numbers, there were -- costs were blown up by 60% but no sales on the stock if you look at the anr function on the bloomberg. a little bit of a cell down out of the stock. fromhaving an outperform credit suisse and jpmorgan. samsung electronics is lower in the soul session in late trade ahead of its first shareholder meeting at agm tomorrow. the first time shareholders has met since the chair li was taken to prison. a chart that shows a much china has been importing from australia. you can see that big spike coming through in those green bars while at the same time the amount of things that australia is buying that were made in china falling. a lot of commodities and what

china is importing from australia. red wine and medicine picking up. interesting to see the turnaround in that relationship that china is buying more us trillion goods and australia not buying so much from china. anna: we'll talk a lot more about print -- trade. we will be joined by richard baldwin. london's worst terror attack in a decade has left more than five dead. the attacker ran down pedestrians on westminster bridge and stabbed an unarmed policeman outside parliament -- before being shot. u.k. prime minister theresa may said today will be business as usual for london. nehra, tell us what the mood is at once mr. -- westminster. >> it is fairly quiet around here in terms of pedestrians been around.

it is early in the morning. there are many film crews, i can see at least four police man's in the vicinity. i am standing on the south side of westminster bridge which is a bridge that the attacker yesterday drove down, knocking down pedestrians as he did before crashing into the gates of parliament. and running in. he was stopped by a police officer who did get stabbed and eventually died and another police officer in civilian clothing shop the attacker. the event left five people dead including a police officer who tried to stop the assailant and the attacker. as more than -- and more than 40 people injured. theresa may has been saying that business will continue as usual. we are expecting parliament to sit and theresa may to address the lower house this morning. her statement of defiance comes after a lot of statements of

support from leaders around the world after this awful attack yesterday. which is being treated by the counterterrorism unit as an islamist related attack. anna: thank you. live for us on the ground, she will bring us updates as we go through the morning. for more on yesterday's attack, let's bring in polly neville jones, the former chair of the --. intelligence committee joining us on the phone. great interview on the program. thank you very much for joining us. what are the immediate concerns that you have about what you saw yesterday? i imagine an assessment of security around westminster will be a priority. what else comes to mind? westminsterly itself is obviously an issue. the agenciest and will be considering whether there needs to be any further

reinforcement of security in that area and they are going to post more policeman for purposes of reassurance and confidence and increased security. after an attack like this you have to pursue other leads. it is very clear that this man, one of the things that is not clear is was it his own car or did he hire a car and did he have accomplices westmark there is a strong hint that police are confident that they know who the individual is so they have not released his identity. which i think means they have a certain number of leads to follow which they will be doing. they will also ask the question, can this lead to copycat activity or will the other associates or other people who may be inspired by this kind of ?hing to take action elsewhere there will be not only concentration on the scene in london but also they will look

more nationally to see whether there are any vulnerable points or areas of policy which they need to examine rather closely. thoroughl be a very assessment of the situation and of possible consequences. matt: what do you think about the international response because yesterday we heard from angela merkel and others. it brings to mind or makes one question how these corporations are going to work in a post brexit world. confident. pretty the sense of self interest and unity on a subject like this will mean that though the u.k. thenot be inside institutions that are being built up within the european union, arrangements will be made to have a close relationship with the u.k.. you can imagine 27 plus one

organizations of the kind that make that transition fairly seamless. i hope that is the case. i am pretty confident that the common sense of those involved in the security of european populations are not going to allow institutionalists to get in the way of real security. matt: i did fly in from berlin last night around 6 p.m. and i noticed increased security already. do you expect to see more on the borders of the u.k.? guest: i think everybody will be alert in a sense. the control will be amongst it. apprehensions,y any leads, they may be looking for people who are trying to leave the country. one does not know. i would expect that all the systems, all the parts of the machine which are involved in

security will be on extra specially alerted this morning. anna: we are seeing now change to the security level at the -- that the u.k. government has assessed. since 2004 it is at this second life -- highest level in can be. do you expect that to change? guest: no. it is not a severe. there's only one stage above that, critical. we know that something is about to happen. arise,hat situation to the level could change. i think the problem with the next higher level is the chances of having time to engage in activity rather than dealing with the incident means it is unlikely to be used very often if at all.

it remains at severe. the: you mentioned questions around whether this was someone acting alone or in conjunction with others, do we know anything yet about who he might have been influenced by, that is tricky without net -- a name. guest: i do not have any personal knowledge. theuld imagine that if police who have a body in their possession, it sounds to me as if they probably recognized him. which means they will have some clue. hash also means that he become known to the police and to the agencies as well. they will have some clue as to his associates. that is why i think the likelihood of them being able to move quickly towards being able to find his associates and his thements, how he obtained

car, for instance. i would think those things could happen quite rapidly. i would expect them to be on the trail pretty fast. anna: thank you for joining us this morning. former chair of the u.k. joint intelligence community. matt: the trump trade after u.s. equities sold off on tuesday. they closed flat yesterday. we will discuss what investors are looking for and the u.s. presidents policies. this is bloomberg. ♪

anna: welcome back. from hong kong, a little bit gloomy. the hang seng falls. equity market seems to be waiting for what president trump can deliver. business the bloomberg

flash. here is juliet sally. -- juliet sally. five people were left dead including the police officer. police are working on the assumption that it is "islamic related terrorism." the police officer killed in the attack has been named. a member of the parliamentary and diplomatic command. representsiament democracy, freedom, the rule of law, commend the admiration and respect of free people everywhere. target, forto the those who reject those values. but let me make it clear today as i have had calls to do before , any attempt to defeat those values through violence and

terror is doomed to failure. global tanks are pairing back staff. ibs is preparing to eliminate as many as 2000 jobs. the process. according to a person familiar with the matter other lenders include ubs are taking similar steps. a hiring boom accompanied $321 billion in fines. sent westinghouse will be deciding whether or not to file for bankruptcy. it grapples with the cost of construction delays in westinghouse projects. -- it willmated an need to take a write-down of $6.2 billion. that is your bloomberg business flash. matt: thank you. market sentiment steady yesterday. into the morning after a dive on

tuesday. u.s. equity markets closed fairly flat after their worst loss since donald trump was elected. that trickled into asia, the u.s. 10 year yield also steady after four days of declines. thanks for joining us, great to get your time. let me ask you about something mliv. traders will posit and wait to see what is done with health care legislation? >> we should not focus on the legislation itself. two weeks ago this was not even on the radar. been assuming that there will be substantial changes that trump can deliver that he can push through congress. this will be the first major test. that is why we have a bit of a wobble if he is not able to get

this through. what else can he get through? not health care in itself but it sets the direction for his fiscal policies for the entire presidency. anna: the extent to which you might be concerned about a feeding in the rally might depend on the extent to what you think trump was responsible for in the first place. how much has the rally been about trump and his policies and how much about the underlying threat to the u.s. economy? guest: both of it should be about the data, about the underlying strength of the u.s. economy. have beeny would well-placed and 17 markets. theepends on how much question toward earnings and expectations which could be in the high single digits. that was just as important. that will be the test it at the same time, we have generated so

much more momentum. lift should not be discounted. matt: we're not going to pay attention to closely to the actual health care legislation. it the power and the mandate that donald trump has on capitol hill, which policies are you most concerned about for which he could use that power? do you want to see the regulation most importantly, do want to see tax reform, do you want to see infrastructure spending most importantly? guest: in terms of what can sustain this rally and expectations, that links into infrastructure, probably the most important aspect of this is how you can combine the two. can you change taxation or incentivize corporate profits overseas to be repatriated used to fund the structure.

matt: this is a much more difficult task than reforming the health care legislation. this is something that hits the politicians strictly in their wallet. guest: one other concern is the health care administration will bolt things down. and the taxation issues as well. that is less a wave of concern. let's not forget the underlying u.s. economy as well and the global economy. look at europe and asia and emerging markets. those things put together even if we get a wobble today should get out of markets. the shocking allegation. what does this mean for the dollar question mark you are talking about policies that could he enacted by trump. overvalued -- is the dollar overvalued?

guest: i think it would threaten the u.s. growth story which could feed into the global growth story in a negative way. we are dependent on u.s. demand. theink for the fed and dollar compared to medium and long-term fiscal changes that the government could bring emerging markets will be quite flat as well. two things that the fed will take into account, how the dollar feeds in and it does want strong dollars to tighten them. chart function that i am sure you go to often as well. how do you think this represents your expectations? is the fed lowballing us on what they're going to do? >> the fed's most recent reports are in line with our expectations. validatewant to

excessive expectations. the dollar fed into that story. -- last allocation change going longer in the u.s. and 10 year. a defensive position. some people suggest that the fed is behind the curtain. guest: where is the curve and what kind of a terminal structure, what kind of economic table rule?es the i do not think you could -- we were not asked acting the balance sheet ratios to be as high as they are right now. we have to take that into context. anna: thank you very much. matt: next, the rise of protectionism.nd

how did we get here? our next guest will explain. this is bloomberg. ♪ live-stream your favorite sport

at the airport. binge dvr'd shows while painting your toes. on demand laughs during long bubble baths. tv everywhere is awesome. the all-new xfinity stream app.

xfinity. the future of awesome. anna: welcome back. this is bloomberg daybreak europe. pretty stable. quite a lot of stability over the last 12 hours in markets as we wait to see what can be the legislative agenda in the united states. we have the market closing. kospi closing. not a lot of stability. we were down on monday, upon tuesday, upon wednesday. -- up on wednesday. financials gained as

gain hoping to hold that index above water and you see the msci asia-pacific index unchanged. anna: the new edition of daybreak is available on your bloomberg and mobile. let's look at the top stories that have made it into today's edition. the cover story is terror in london. world order -- world leaders offered support after the attack left five people dead including a policeman and the attacker himself and wounded 40. speaking outside her home in downing street, theresa may said today will be business as usual for london. >> tomorrow morning, parliament will meet as normal. we will come together as normal. and londoners and others from around the world with -- will come here to visit this great city will get up and go about their day as normal. they will board their trains, they will leave their hotels,

they will walk these streets. they will live their lives. ecb: the next story is the will give tanks a last offer of free long-term cash today that moves toward ending quantitative easing and even a rate hike before after. the refinancing operations will be at 10:30 a.m. london time. the take-up made between -- be between 30 billion euros and 750 billion euros according to a bloomberg survey. very broad range there. focuses oneak google's ad crisis. to have gone more global. it went global after some of the biggest marketers halted spending on youtube and the companies display networks citing concerns about ads running alongside offensive videos and many of the great and good from the advertising industry in london this week.

it is advertising week europe your in london. matt: let's get more on the lender -- london terror attack. what is it like down there and give us the latest as well. have a police presence here, there is a police officer addressing camera crews right behind me. i can see at least four police vans and start -- standing on the south side of westminster bridge, quite away from the houses of parliament, this road is closed off and it is this road going across the water that the attacker yesterday drove down, knocking over pedestrians as he did before he question into the gates of parliament and ran in to be stopped by a police officer who was eventually stabbed. the attack left five dead including a police officer tried to stop the attacker and the attacker himself and more than 40 people injured. theresa may has come out with a statement saying it will be

business as usual and parliament will continue this morning. she is due to address the lower house this morning. anna: i was going to ask how this affects parliamentary business. we saw parliament had to be suspended, the business department had to be suspended in london and other legislative bodies around the u.k. yesterday. what happens today? yesterday,ay my parliament was on lock down for several hours. hundreds of workers in the parliament building were basically kept on lockdown. theresa may as we know was quite swiftly whisked away in a jaguar to safety. the scottish parliament also suspended its debate. today it will be business as usual. theresa may has said that very clearly. in terms of police, we have seen increased police presence on the road around london.

the army might be brought in if necessary. in terms of the level of the terror threat, that was raised for the second highest security level back in 2014, that remains unchanged. police are treating this attack as an islamist related terror attack though no organization has yet claimed responsibility. anna: thank you very much. andrise of protectionism populating is unraveling well-established trading ties. donald trump has pledged to renegotiation deals like nafta and criticized china forming a feeling it currency. in the u.k. a decision to leave the eu means a new trading relationship across the channel. the premier of china warned against the rise of protectionism in a speech in australia this week. -- we need toto continue to expand trade. that is the solution. we cannot close our doors.

that is not the solution. so i am here to discuss how we freeurther operate our trade areas and how we can build for the content -- consensus and investment around trade services, do we want to continue to open up, we also continue to import more from australia. our next guest is richard baldwin, the president for the center of economic policy research and the author of the book "the great convergence." welcome to the program. many people are trying to work out what links there are between the organization and the rise of populism. what do you think that ovulation --populism gets wrong about gets wrong? guest: people are

feeling anxiety that they did not the last time that globalization advanced so quickly. regardless of your sector, regardless of your skill group you are not sure whether your job will be affected. great diversion and there are in ideas -- there is a great convergence. wages have not converged. the part of the six all that has been left undone, hence the situation that we find. wages in emerging markets are far behind that in rich countries but they have risen rapidly. this difference in the wage rates and the fact that these workers are using our technology seems unfair and i think that is -- people are angry that their companies are taking their

technology and moving their jobs abroad competing with lower wages and that makes people angry. in some sense it has gone on for so long and governments have been unable to address it that people are reacting as individuals and communities that feel threatened. they feel their committees are threatened by this trend that they do not understand. matt: isn't there some concern that the rise of globalization goes hand-in-hand with the rise in income inequality, even in the same communities, income inequality any u.s. and the developed western world. >> globalization is always more opportunities for your most competitive citizen and more competition for your least competitive citizen. there is always an element of inequality. , evencial welfare state in the u.s., advances with student loans and land grant colleges, people had the means

to hope they could take advantage of globalization. globalization has advanced but the social welfare state has retracted so people feel a little bit left betrayed by the government. eight years of the kratz and republicans, nothing changed. the chineserd from premier talking about the benefits of globalization, global trade. stake in thatt of game. much is that relationship really at threat by what we hear from donald trump? ratherwe are seeing transactional administrations. >> that is a replacement for the

-- it is a chinese-led tpp. the engine is running but the driver left the keys in the ignition and open the door and walked out. the thing is ready to go. rcp is the only other vehicle. it gave a big initiative to it. there is no doubt that we do not know who will take leadership of tpp but china is one of the leaders or part of a team of people who will go ahead. tradegood, it is a free agreement but it does not have the underpinning of production networks that tpp had. he, capital effort flows, does not have those elements. and: skeptics would say donald trump's white house would say of course the chinese are arguing for a rules-based free trade off the likes we have negotiated. of course the germans are arguing for the continued

globalization, multilateral station, and free trade because they have these massive trade surpluses. if they had half $1 trillion in trade deficit, do you think the chinese would have the same voice right now? guest: they have been waiting in terms of exporting and growing. the deficit thing, the way i like to think about it as if i am spending more than taking a net income i have a personal deficit. part of that deficit is with the grocery store. i do not fix the imbalance by fixing it with the grocery store. we stop focusing on bilateral, it is a domestic thing for the u.s., their domestic policies have led to more spending than savings and that leads to a trade deficit in a matter what. that cannot be fixed by trade agreements. change ae trying to micro-behavior to have macro-impact and it does not work. the: you mentioned complexity of global supply chains and how trade is not about nations.

trade does not necessarily work that way. brexit context is the government have to understand about the global supply chain to get policy around trade right? guest: a lot of the people involved in brexit are thinking about trade as if it was in the 20th century as it was goods crossing borders. britain is part of factory europe. trying to do is by putting up barriers against trade or migration am a they are building walls and side effect retrying to ship more jobs from one end to the other. it does not work. it will make england less competitive. england is not going to sink into the sea but the adjustment will be lower british wages compared to other production locations in the eu and that will restore british competitiveness. the price will be paid by lower wages and salaries in -- and british workers who work in competitive industries that are

facing competition, the manufacturing sector in particular. matt: from an investor's perspective, when you look at the new paradigm in global trade, the uk's leading off from fashioning u.s. inward looking policies and maybe rejectionist policies, how does that change the way you invest in the longer term? guest: it raises an important question, which markets do you want to be and the end result is the market will be poorer and income levels will be poor. can -- our investors seeing that because it is going to be a structural change. even -- we are at five to seven years. theee material change in five to seven year context and that is difficult to tell. there's a that of a holding pattern. at the same time it is a risk

that is increasingly prominent. the applications are not that clear yet. anna: a little bit of a spike upward in the pound, moving upwards, it seems to make directional moves at this time of the day between 6 a.m. and 7 a.m. london time in the most recent week. in terms of the focus on brexit and you talked about how the wages issue, does this not matter because it is so much more about services these days or does this not matter because tariffs are low, give us your review of the u.k. falling back on to buteo. guest: that would be bad because the tariffs of the eu are relatively high in some manufacturing sectors. for final cars it is 10%, auto parts it is 4%. that would make it difficult for

producers in the eu to do part of their work in the u.k. it will lead to a closing off of the markets. it is so asymmetric it will raise the cost of producing in england much more than it will raise the cost of producing in the eu. it will lead to a movement of production. britain is messing up its competitiveness. or the u.s.eu to messing things up. unilateral damage to your competitiveness is not a good thing to do. it will be paid for by the workers, basically. anna: thank you for your time. richard went, president of the center for economic policy car research, and author of "the great convergence." and jeffrey yu. matt: you can watch the show using tv go on your videos as well as they video stream. it can follow our charts and

functions that we use and you can reach out to the shows directly by clicking send ib. there is a blue link on the bottom of the screen. you can ask richard a question, you can ask jeff a question, you can take part in the conversation which is why it is so exciting for bloomberg users. are said toicials be warning that the u.k. might walk out of brexit talks without any kind of deal. we will break down the potential implications and talk about the stress on the u.k. consumer as well. this is bloomberg. ♪

matt: good morning. welcome to bloomberg daybreak you're at -- europe. we're looking at a live shot at new york where it is to 49 a.m. so quite early or quite late depending on your perspective and your age. is 6:49 a.m. and in

hong kong it is 249 in the afternoon. let's get the bloomberg business flash. juliette: london's worst terror attack in more than a decade has left five people dead including the attacker in the police officer he stamped. people injured. authorities are working on the assumption the attack was " islamist related terrorism." no organization has claimed responsibility. the police officer in the attack was pc keith palmer. global banks are paring back stocks. and preparing to eliminate as many as 2000 jobs taking new customers for suspicious trade as it digitizes the process. other lenders including ubs are taking similar steps. it anza hiring boom that accompanied $321 billion in fines.

said the nuclear whim -- unit of westinghouse will decide whether to file for bankruptcy. that is one of the options as they grapple with the cost of construction delays. it estimated it will need to take a write-down of $6.2 billion. that is your bloomberg business flash. anna: thank you. eu officials have warned that the u.k. might walk out of brexit talks without a deal according to a private memo from people familiar with the discussion. eu brexit negotiator said britain would not be asked to pay more than necessary. >> when the country leaves the union, there is no punishment. there is no price to pay to leave. settle the accounts.

no more, no less. not pay ah will single euro to something they agree to as a member. in the bit of a spike pound in the last half hour. this is the pound against the u.s. dollar. more generally on the move. this time of day attracts more interest in the pound in one way or another. we have seen this time of day fairly active for the u.k. currency. our guest is still with us. what is driving the pound at the moment, there is a lot of sentiment, perhaps related to yesterdays event but more generally relate to -- related to brexit. is the pound in limbo to you, do we wait for more clarity on brexit, or is this the bank of england's story humming to the for? jeff: it is a combination of things. hitting -- i think the

latest jump is the inflation numbers that we got. going toof england is say it will be transitory and look past that. think shorts are getting tired if you want to [inaudible] that is the best way to look at it. or if you want to be short against the dollar. matt: the short positions are huge, now at a record level on sterling. marginalat is that information to justify that shorts? the next trade will be [inaudible] i would not say it is total capitulation but at the same time [inaudible] it may beooks like this bike we are seeing in sterling may be a drop in the dollar. i am looking at a similar spike in the euro.

right now rising just above 108. you expect continued strength in the euro. our investors position oversold on the euro? >> absolutely. it is the currency and assets in europe has of the political risk my this is difficult to get array interested in the of elections. a lot of it is justified. we have a high probability of of [inaudible] becoming the president of france. the highest i have heard. guest: clients at the same time are looking for some defensive positioning around this. going back to our earlier view, the dollar is strong and the fed cannot be too hawkish. you want an additional insurance

position, avoid u.s. treasuries. anna: you're talking about the euro bearish bets dropping. why are you more concerned about le pen? guest: you can measure your probabilities in different ways. do you want to be over defensive, that is what happened last year. at the same time, whether you are at 49.9% or 1%, your base case is not for winning. it is capturing the shift from what is a bit of complacency right now or low probabilities shifting toward a high probability. that is the insurance that you want to own. matt: do something like the attack yesterday in westminster even though it was here in to the pan a boost and the national front in the french election? guest: there will be people revisiting the probabilities to

my their assumptions on the chances of a nationale victory. it could have more of an impact is we move closer to the election time. rise will bet offered to banks today. give us a gauge of, to nervousness there might be about tapering. guest: this has not been to high on the agenda but given the data, this is nervousness. something that should be celebrated. anna: thank you for your time this morning. from ubs wealth management. the: nine months on from brexit vote, how is consumer spending holding up? we will bring you analysis plus earnings from retailers next. the second biggest clothing retailer in britain.

this is bloomberg. ♪

♪ terror strikes london, prime minister may says parliament will meet as normal today after an islamic extremist is shot dead after killing four and killing 40 westminster. >> the global stock selloff eases. >> the road to normal, the ecb takes one small step towards exiting stimulus with its final , but how big will be demand be? ♪ come to bloomberg

daybreak. >> waiting for numbers from next. they reported their sales update and cut their profit forecast in january. 2017 how look will be the main focus of this up eight. -- update. held up, but has come off. we would discuss that in a moment. >> let's look at futures. little change in the u.k. after the ftse dropped the most among the three major european indexes yesterday. 40 and dache cac

futures rising a bit. that ftse futures are little changed, showing green arrows. >> looking for some more details on next this morning. the full-year final dividend per pence per share. >> adjusted pretax profit of 790 in linepounds, bang with estimates. ,s well as adjusted eps numbers 441 pence, so the adjusted eps smidgen.ting by a is that a proper british term? profit in line, and dividend something the investors will pay close attention to.

>> full gear sales the climbed by 2.9%. we will return to the subject of u.k. retail and a moment. let's have a look at where the markets in asia have come to come a generally flat. i up by .1% as markets in asia are closing up. muchof focus of just how tightening the authorities, the boc, will have to do. we have the futures of various bond markets. >> those are flat. you will see the field on bunds trade up a little in francehe yield

come down the little bit as the price moves in the opposite direction. >> let's get to bloomberg first word news. london's worst terror attack has left five people dead including the attacker and police officer he stabbed and 40 injured. authorities are working on the assumption that the attack was "islamist terrorism." the police officer in the attack has been named as a member of the parliamentary and diplomatic protection command. values are parliament represents, democracy, freedom, human rights, the rule of law, command the admiration and respect of free people everywhere. is why it is a target for those who reject those values. it clear today, as i have had cause to do before, any attempt to defeat those values through violence

and terror is doomed to failure. the european central bank is about to give lenders a last offer of free long-term cash or it the final round of full-year loans at 0% and lower will be a lot to two banks today. in return, the ecb will get a sense of any concern for its extraordinary stimulus as the recovery calls for exit plan. the fbi reportedly has evidence that president trump's withiates coordinated the russians. according to cnn citing unidentified u.s. officials, this is partly what fbi director james comey was referring to when he said his agency is investigating campaign ties to

russia. the white house and the fbi did not comment on the report. the republican head of the house intelligence committee has offered support to donald trump tower was tapped. the intelligence community had collected multiple conversations involving members of trump's transition team. i somewhat do feel vindicated by the latest of elements. in japan, the head of an educational foundation at the head of a real estate scandal said he received a donation from prime minister shinzo abe. he said he was handed an envelope containing $9,000 during a visit to her kindergarten. a top government spokesman has denied the allegation. global global news 24 hours a day

powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. you can find more stories in the bloomberg at top . we had a muted session, the nikkei closing higher as the yen weakened and lay trade. coming back by .4%. a good day and australia thanks to the rebound in commodity prices. in focusas a stock after earnings that missed after the bell yesterday. no brokers have a sell recommendation on this stock. the son under pressure in trade ahead of its agm tomorrow, the first since jay y. lee was taken into custody. speaking withr li malcolm turnbull and australia.

goodshart #6966, austrian sold to china, the green bar rising significantly. the wide bar shows on strain demand for chinese goods is waning. no doubt that trade relationship will be key in those talks. matt: thank you very much. juliette saly and hong kong. retailer,s on a u.k. a bigger than forecast jump in inflation means a real pay was flat in february for the first time since 2014. we will get an update on overall u.k. retail sales later this morning. next reported a 2.9% drop in sales with total group sales broadly flat.

what do you make of the next numbers as the uk's second-biggest clothing eat i'm epslife b but lower sales? >> it is warning of a tougher year and saying there are various things going on in the market that will make life difficult. we are spending less on clothing and spending and other areas. rising inflation, earnings prices from higher sterling, all making for a difficult year, but particularly clothing. clothingtalk about retailers, and actually there are other competitors out there. -- would have to matt: we have seen food inflation is the big story. i am based in berlin.

we hear about food inflation more than anything else. of inflationype would keep you from buying clothing. >> food inflation has been muted in the u.k. of dining outrea and eating out where inflation could play a bigger part. we are spending more money on experiences, and if prices rise there, that will take more of our money or we eat in. anna: wages could be interesting there. u.k. retail sales excluding autos year on year. then hasretail scene been pretty resilient post-brexit, but some people have questions about whether that resilience remains. >> the discrepancy between the accelerating inflation and the sluggish wage was a factor of

weakness for consumers in the u.k.. worrying event is more than last year as you know roughly 20 billion out of the 30 billion spending by u.k. consumers was financed by credit. that is making the consumption vulnerable to tighter financing conditions, to the fact that consumers cannot take on more and more debt forever. matt: you expect on that subject of be a ot to finally start combating the drop in town, rise in inflation, with increases? >> we are seeing some clear signs that the boe is doing some kind of huge turn. in august, the boe was aggressive with the 60 billion easing program, rate cuts, and now 6-9 months down the road, we

are hearing talks about rate rise. this is illustrating the limits of the weaker currency to address the deteriorating or challenging business conditions. thene hand it is true weaker pound has had some benefits from tourism and exports, but we are now seeing the weaker pound is squeezing consumers, which remain the main engine of growth in the u.k. economy. arehere do your concerns around retail lie? the parts of the retail sector will feel this the worst? >> immediate the big ticket items will get hit the worst. we have a furniture retailer say the other day that february has an difficult. spending hasthat taken a pause across the board in february.

the big-ticket expenditure items, if incomes are squeeze, they will put that off until they have more money in their pocket. clothing is challenge. i think those will be the areas hit first. anna: thank you very much. london's worst terror attack in more than a decade has left five dead. the attacker brown down pedestrians on westminster bridge and lately stabbed and unarmed policeman before being shot dead. today will beid business as usual for london. we are at the scene of the attack where it is not exactly business as usual. certainly is different to a usual day, at least where i am standing on the south side of westminster bridge. womenare police men and

walking around, and at least 3-4 police vans close in the vicinity. we have heard the metropolitan police of london will give a state and at some point today. we are waiting for that. from primerd minister theresa may that the house of commons and house of lords will sit today, and she is expected to address the lower parliament waser on lockdown for several hours yesterday after the attack happened. that is looking back to yesterday, now business as usual, but theresa may suggest doing britain should try to get back to business as usual. what does that mean about the business of westminster suspended yesterday in london and other legislatures around the u.k.? >> that's right.

the house of commons was suspended for several hours on lockdown and the scottish parliament suspended their discussions yesterday, but theresa may in her statement really did strike a defined town. she talked about the fact that life should go on as normal for londoners and suggested it would be business as usual, and that is what we are expecting today in terms of him piece of arriving in the house of commons and lords sitting as normal and theresa may expected to address the lower house today as well. in terms of business as usual with security of coursework there is is a stepped up a police presence around london. we have been told the army could be involved if necessary, but london was put on the second highest security alert in 2014,

and that has remain unchanged. this is being treated as an islamist related terror threat, but no group has come forward to claim responsibility at the moment. anna: thank you very much. the mayor of london saying londoners should be aware that there will be additional armed and unarmed police officers on the street to keep all those visiting the city safe. matt: with just one month go and tell the french election, a new ron ahead ofac marine le pen in the first round. this is bloomberg. ♪

matt: welcome back to bloomberg daybreak: europe. you are looking at a rain the day in berlin over the brandenburg gate. berlin.19 in

i am normally there. i am visiting london for the next couple of days where it is 7:19 in the morning. it's go to hong kong, where is 3:20 in the afternoon. thank you. london's worst terror attack in more than a decade has left five people dead, including the attacker and the police officer he stabbed and 40 injured. authorities were working on the assumption that it was "islamist-related terrorism." the police officer has been named as keith palmer, a member of the parliamentary and diplomatic protection command. values are parliament represents, democracy, freedom, human rights, the rule of law commands the admiration and respect of free people everywhere. is why it is a target for

those who reject those values. ,ut let me make it clear today as i have had cause to do before, any attempts to defeat those values through violence and terror is doomed to failure. toshiba has said the board of its nuclear again it weston house will decide whether to file for bankruptcy. is one of theit options under consideration as toshiba grapples with cost delays. it will need to take a write-down of $6.2 billion. google's advertising crisis has gone global after some of the biggest marketers hold of their spending on youtube. are and johnson & johnson pulling ads amid concerns they would run alongside offensive videos. google tried to head off the backlash implementing new tools

and policies, however advertisers were waiting to see results before placing orders again. anna: thank you. we are one month away from the french election. n wouldoll suggests macro be le pen in the first round. in the second round, it shows macron 65% to 25%. -- 35%. up the french election tracker here on the bloomberg. we can look at this measure of support between le pen in the paint and macron in white. moretors are coming complacent about what we might see as a result here. how complacent are you? number,nk there is one

40% of french voters are still undecided. any is probably what makes exercise in forecasting difficult. it is unusual to have such high numbers undecided so close to the election. verynk we still have a bumpy month ahead of us in terms of what could be the final outcome of the first round and the second round of the presidential election. matt: we had ubs on a moment ago, and he said there is a 40% chance that marine le pen wins out right. that is the highest i've heard. father whoen's passed the first round lost in the second round. is that how it is likely to turn out this time as well? >> there is this class ceiling for the national front to pass

the 50% threshold. we are in a different situation from 2002, in particular when you look at the original 40% tons, we have seen 45%, which is changing a little bit the picture compared to a decade ago. it is difficult to make an exercise of probability. the grass where you are tracking probabilities of very small shift of the voter has significant impact on the probability, and this is where the probability exercise in my you is very treacherous. i would not rely too much on this probability because things can change dramatically chest with a small shift. we are keeping an eye on marine le pen who is taking on french radio at the moment

saying the french need to work with syrian and russian intelligence. we will see if she comments on london and see if she uses those events in the election. is aligning herself with the russians especially considering donald trump in the white house relationship with russia. >> as investors, the endgame is to say between politics and economics, we have to focus on the economics and improving economics rather than the politics. the politics is interesting and creating noise, but the sheer reality in terms of taking investment decisions is that the underlying economic picture is improving, and this for me is proving more interesting. anna: does this push the euro further away from parity with the dollar? we see some strength. was to beour views

, and right now global allocation strategies are more than 70% of euro. led us to take a different view is the consensus was so bullish on the dollar and was probably underestimating the fact that we were to have some kind of tightening of the monetary policy, but there would activity in of europe, so there is support for the euro. the hopes that the dollar would keep strengthening, or sometimes the worries depending on which side you are on, what were to consensual. anna: thank you. 7:26 in london. matt: that is it for the program

today. the european open is up next to it i will join guy johnson and we will speak with a representative to the french president.

♪ guy: good morning. i am guy johnson. i am in london, as is matt miller. parliament gets back to work after london's worst terror attack in a decade, five dead, including the assailant, 40 injured. how will the attack affect britain at a time of uncertainty/