anna: macron rally. global markets soar after the centrist candidate is seen as the favorite in next month's french presidential runoff. meanwhile, le pen steps down as leader of the national front party in an effort to expand support. president trump wants to/personal income tax -- wants to slash personal income tax. an outline of the overhauls. anna: and we are officially in european earnings season. the latest figures from novartis to ericsson, and ppg sweetens an offer.

welcome to "bloomberg daybreak: europe," our flagship morning show from london. i'm anna edwards. manus: i'm manus cranny. anna: lots of earnings coming through, keeping and i'll the transatlantic m&a. we have sap numbers coming through, reiterating the 2017 forecast and giving us a host of numbers. q1 revenue beating estimates, that is one of the headlines. it's coming in at 5.2 9 billion euros against an estimate of 5.16 billion. it does seem as if that is where we got the sap story. jousting with longtime rival in thecore, this is

context of the software says it ishe company being run in their data center and cloud computing software delivered online, for all those different products on different platforms. oracle reported a big jump and that competition is key. watch out for software license sales, that is what the big factor is, and the prophets number is 1.2 billion against an 1.20 3e of one point 2 billion. in novartis, they're looking at $1.11. they have been spending money on their hard drugs, so marketing costs have been core. they confirm the 2017 outlook

which should be low single-digit growth back at the start of the year. the adjusted net income is 2.90 atillion, beating estimates. $2.64 billion. is thee want to see business originally penciled in. it is an attractive asset. a nice set of numbers. net income of 2.69, above the streak. anna: if you are a billionaire, you got richer yesterday here in europe. take us through this chart. manus: everybody talks about the macro value, whenever marine le pen is up to we can discuss, but if you are a european billionaire, your wealth accelerated by almost $27.5 billion in the space of one day, 2.6% of the wealth was added.

and theand cac up, volumes in those markets were up nearly 200%. this is the momentum. you can see the poor are in asia. anna: indeed. similarly from the stock market rally, because this is an dollars, a lot of that is coming from the euro gains. let's show you where we are on various assets. fascinating stories to dive into. we just got the euro up to show you where we are, with all the focus on it yesterday. the bloomberg teller index, we see some gains in the dollar this morning, the yen on the back of it in this morning's session. manus: that dollar story is going to be inextricably linked to what happened with donald trump and that potential tax. you have donald trump talking euro-dollar at one 1.0865.

can that break higher? volatility dropped the most on record, the dollar index banging away. anna: you mentioned shanghai was a different story. today they are more in track with the global rally, the shanghai composite up by .5%, msci closing at a record, asian stocks extending the rally. it's a broader asia story but shanghai did drop, into that third week of loss. we will keep an eye on that story, and this is the canadian dollar against the u.s. dollar, its lowest in the year. trump was reported to say they could impose a 20% tariff in a briefing on some journalists, watching this sector. wilbur ross says this is a bad week for u.s.-canadian relations. manus: that is what unnerves

markets, on the flip of a time he can -- flip of a dim, he can change his mind. in regardsff lines to tariffs that are possible. anna: let's get to the first word news with juliette saly. juliette: anna, thank you. u.s. president donald trump has called for tax cuts for individuals and to lower the corporate rate to 15%, according to a white house official. tomorrow trump plans to make public the broad outlines of what he wants to change in the tax code. further details are likely to the left until later negotiations amongst officials. in south korea, a u.s. nuclear power submarine has arrived as part of its scheduled to conduct routine patrols. the arrival of the uss michigan on the korean peninsula comes amid heightened tensions in the

north over the nuclear weapons program. the u.s. secretary of state is expected to discuss the denuclearization of north korea at his meeting with the un security council on friday. china's nonperforming loans have stabilized and the pressure from capital outflows has eased as the nation's economic recovery takes hold. that's according to the deputy central bank governor, speaking of the international finance and infrastructure for a at bloomberg's headquarters in new york. >> we try to maintain economic growth and also we try to work andhe deleveraging process making sure that our lending and broader money supply has been .rowing consistently juliette: turkey's prime

minister has said his country is tired of the european union treating it like a student. speaking exclusively to bloomberg, he said turkey won't tolerate being talked down to. [speaking turkish] >> we see finger-pointing at turkey, instructions to do this, not to do that, as if they are the teacher and turkey is their student. that kind of thing won't be accepted by this nation. unsolde: the number of london homes under construction rose to a record of 27,000 in the first quarter due to higher taxes. that is the highest level since they began compiling data in 2009. the rise comes as affordability issues and economic uncertainty dampen demand for the most expensive properties. global news, 24 hours a day, powered by over 2600 journalists and analysts in more than 120 countries. you can find more on the bloomberg at top . we're in late trade here on

tuesday in asia, and we are seeing a lot of games coming through once again in these asian markets on the back of these global risk on appetites. the nikkei in late trade up by a8% and we are seeing rebound in china after the shanghai composite had that 1.4% drop yesterday. we will speak to michael every, saying you can't read too much into this, but it's different to what we saw across the rest of the globe. we are seeing risk on today and very strong movement coming through in the malaysian ringgit. let's have a look at stocks, reaching a record high in hong kong, up by over 5%. this is on the shared by back, up by 77% year to date. omatsu doing well on the back of caterpillar results. is down by about 1%

even though it had a pretty good quarterly update. that is one of the companies looking toward buying toshiba's memory chip unit. let's have a look at this chart on -- we were talking about that momentum that you can't pick in the china market, but the yuan could have a bit of a come back. this is the bloomberg china monthly estimate, showing an economic recovery in china. this green bar is showing more inflows coming through into the chinese economy, which is getting solid support. much forank you very that roundup. after round one of the french election global markets rallied o the optimismn of the centrist emmanuel macron beating the far right candidate marine le pen. asian equities rose, the msci hitting the whole country world

index -- hitting the all country world index. anna: in an effort to shore up more support, three le pen stepped down as the head of the national front party in order to be a candidate for "all the french people." she announced her decision in an interview with france 24. >> [speaking french] conviction, but now was a moment to move from work to action and this is the reason why it has been essential for me to take leave of presidency from the national front. today i have no longer the president of the national front, i am a presidential candidate that wishes to unite all french people behind a project of hope and security. manus: joining us now on set, j.p. morgan asset management strategist. when you see a move like le pen as she has done yesterday, was that a cynical move or a cunning ploy? >> i think it's just a rebranding, i don't think it's

going to fool anyone ultimately. policies,has the same and it doesn't increase the probability of her winning in the second round. concerned,arkets are pulling looks likely that emmanuel macron will be the next president. we have seen that being taken positively by investors. we can't stop worrying about the politics, but we can focus on the fundamentals, which are improving quite strongly. france and the rest of the eurozone are quite positive, and pmi data is positive. what you are seeing -- if you look back to the start of january, 2016, since then approximately 15% of total assets invested in european equities came out. in the last few months you have seen, at most, 3% of it go back in. anna: le pen's on some sort of andanding exercise, nt there was an interesting line

about political paranoia and the european equity story from one of my colleagues, talking about how politics are a reason to avoid european equities, and it results in investors kicking themselves. is that the story written? >> i think it is. i think 2017 is going to be the year where there are lots of political risks that didn't happen. you have a noisy dog barking with no bite. that is creating attractive opportunities, lots of money coming out of european equities, and you would expect that a decent proportion would go back in now that the political risk has diminished. manus: we did this up, the monthly inflows. this is something, if you look back at last year, the amount of money that flowed out last year, talk to me about the flow. are they reinvesting? are you seeing money come back in? and what about the euro?

m together. >> you are starting to see people reallocate to european equities. it's interesting, and conversations i have had with clients over the last six to nine months, everyone has watched the improvement and wanted to be overweight european assets, both have been scared to do so. now you are seeing with the political risk coming down, money is finally starting to trickle in. now that we have the announcement it looks likely macron will be the next president, they could become quite significant. manus: is that enough to turn a trickle to a flow? you have got germany, and and on i were talking -- and anna and i were talking about this -- >> i think italy is the bigger risk, but in a six month view it seems a long way off. anna: just think about germany and not italy. [laughter] >> if you look at the german

election, that's not a risk. the probability of something going bad from a market perspective in germany is extremely low. i think investors can look to the end of this year, the political risk is dramatically lower, and that should turn the trickles -- anna: you mentioned germany, so let's bring out this chart. this is german business confidence, a positive euro area data. when does this start to change the outlook from the ecb? that's the question we will be asking. the might not get it answered this week but we will be asking, and it will continue to be asked into june. >> if you heard mario draghi at the last press conference, he was probably the most bullish i had ever heard him. optic in growth, all the survey data suggesting what european growth is looking like, and you would expect them to reemphasize that. i think it is still too early for them to change their guidance, but our view is that they will by the end of the year, and that is the tapering

of kiwi. -- of qe. by the middle of 2018 a will stop and that will have a meaningful impact on market, with higher bond yields. manus: a meaningful impact. let's see how that plays out. thank you so much. bits and pieces of breaking news. if you are an investor in anglo-american, get ready. anglo-american are considering -- the oil companies were under pressure, the miners retrenched, anglo-american saying they have had an agm where they revised the pay policy of their senior directors. program,ing up on the president trump set to release his plans for changing the u.s. tax code. a big cut for individuals and corporations. details next. this is bloomberg. ♪

manus: it's 1:19 in the afternoon after lunch in hong kong. hang seng is up 1%. overcast, i won't venture a meteorological interpretation of i whether it is msit for rain. news from north korea. the kcna carries comments from the foreign ministry, condemning president trump's briefing with senators on north korea. north korea's maximum pressure engagement policy is reckless -- this is the north korean comments. this as the north koreans conduct their largest ever artillery firing drill on the 85th anniversary of the people's army founding. anna: the president is set to do the briefing later, saying

people have ignored north korean risks, this after the president xi urged restraint. this is some of the geopolitics that markets are focusing on this week. let's talk about more breaking news in europe. numbers out of volvo, the truck maker. these are first-quarter numbers. adjusted operating income, 7.03 billion swedish krona, nicely ahead. north america truck markets are giving us a number, 215,000 units. in terms of net sales, a touch ahead of estimates. volvo navigating an uneven demand picture. helped byruck orders improving economic prospects, including german confidence. whereersus u.s. markets

demand has been flagging following a period of higher purchases. we will be speaking to the ceo of all the at 9:30 a.m. manus: let's get up to speed with the business flash. juliette saly is standing by. fog or rain? juliette: manus. for $4.3 billion. it would present them with a stronger foothold in america with access to a number of stronger pharmacies. europe's biggest publicly traded health care provider also made a smaller purchase to gain merck's portfolio, copycat versions of complex biotechnology drugs. ppg industries says it may launch a hostile takeover of sweetened offer doesn't bring the dutch chemical maker to the table. ceo told bloomberg you will take the proposal directly to investors if there is no

agreement by june. shareholders meet tomorrow, and some are in favor of the deal. and that is your bloomberg business flash from a polluted hong kong. anna: thank you. juliette saly, with the meteorological pulse. 6:23 in london. let's talk about the u.s. donald trump will call for cutting taxes to individuals and lowering the corporate rate to 15% when he unveils his tax point tomorrow. manus: according to white house officials, trump will provide a broad outline for his taxes, the will leave details to congress. trump appears to be backing down over a fight for the mexican border wall. according to journalists, he could delay asking congress to fund the project until september, and the shift could make it possible for lawmakers to pass a spending bill and avoid a government shutdown. anna: jpmorgan global asset

strategist still with us. we have a briefing on tax do ue tomorrow, north korea briefings today, shut concerns looming large at the end of the week. i supposedly market perspective, there's a more immediate nature, the tax plan will be the big focus. what will the response be to a 15% plan? is that feasible? >> if they could deliver it, it would be a huge boost to earnings. if you look at earnings expectations next year, they are hardly buzzed. the market moved but not on the back of higher earnings expectations. theing earnings grow over next 12 months by 10%-12%, even without tax cuts, if you have got that kind of tax cut delivery -- we wouldn't expect it to come through until 2018, but i think if you try and cut taxes that much, it is very unlikely that it will be able to

get through. anna: he's having a falling out with ryan, 20%, 15%, clearly a battle. >> i think markets are at least initially going to be pretty dubious if that is the headline. anna: and we are just getting broad themes, aren't we? manus: the devil would be in the details. what caught my eye is that the final stage of the bull market will deliver strong equity performance. if i look at what happened vix got demolished. are we on the last leg of the dying throes of a crackling bull run? within the well be last two years of the bull market. manus: not this month? >> i don't think so. even if we only have 12 months left in this bull market, what you tend to see is the average return over the final 12 months has been about 25%. manus: you don't want to be

underinvested at all. >> certainly not. if you have two years left, which is feasible, returns are close to 40%. you don't tend to see markets peter out, they go out with a bang. that keeps is pretty cautious. even though valuations are starting to look stretched, its risky on a relative basis to take risks and wait. anna: where does that leave treasuries? i was reading a story, treasury gurus blind-sided, a lot of people struggling to get their heads around how a tax reflation trade is. >> our view is that the pullback we are ceiling is not -- we are seeing is not sustainable. it will never be a straight line. the trend is clearly upwards. when you look at what the market is pricing, you will get one more rate rise this year, what next year, one the year after that. that seems way too slow compared with what's going on the economy. manus: thank you very much. 25%.

mike bell stays. we will hear what the italian finance minister has to say about the french election and how president macron could impact brexit negotiations. ♪

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i'm gonna just go back to doing what i was doing. find your awesome with the xfinity x1 voice remote. ♪ manus: you have been on the move up above 110.06. some breaking news for you. very big deal. warming up in the luxury sector. anna: an enterprise value of 6.5 billion euros, this coming in the last minute or so. the family makes a bid for shares. public offer is subject to financing, also makes a straight 260 euro cash offer.

for christian dior. of detail coming through. mh to buy christian d.o. could tour -- christian new york tour. 214.7 so the bid there a closingoffer on price. interesting to see this kind of performance ping. we also have breaking news from ericsson, let's give you the numbers there. first quarter adjusted profit, 1.1 billion, below what the market was looking for. the new ceo has a lot to do. profitmated operating below estimates.

when it comes to margins, this is where the market may take a more optimistic view. growth margin 30.5%. the equipment market is still seeing negative territory. this is the critical part. everyone was hoping for light in the capital expenditure by the wireless provider. equipment market contracting by two to 6% this year. restructuring charges in the to 8rs of 6 billion billion swedish krona. we are going to round up all of that discussion and the expenditure. ceo at erickson will join the team at 10:40 a.m. london time later on this morning. anna: let's get a check of the markets. guy: yesterday quite interesting and it confirmed positive

momentum in european stocks. they'd moved to the upside but it was done on decent volume. a lot of ravi's been low-volume rallies and that has made the market nervous. made investors nervous. but we saw that coiled spring coming unwound and we saw a big volume today. yesterday, big upside move. about theen talking numbers, but confirmation on the volume is interesting. today, u.s. futures fair value board, thear on the dow called up by 3/10 of 1%. given the rally we saw yesterday, holding on to the games today will be significant. the other thing yesterday, this caught my eye yesterday afternoon with a big move down on the vix. massive gap lower on the vix. this will catch a lot of people on the hop. there has been an ongoing story in the markets about long call

positions taken on the vix i.e. short stocks come along calls. this could be the real pain trait following yesterday. most people were neutral on you -- european stocks, waiting to get involved. there was some option market activity but this big move will cost someone a pretty penny this morning. ,ou can see the open interest the blue line. somebody is very long on these calls and you go back and read on your bloomberg stories about what has been happening. this is the contrast. other side. the someone at some point will have to take this trade and that is something to watch out for. keep an eye on the vix and the positioning. a fascinating microcosm of what is going on in these markets. manus: guy, thank you. as the markets -- our bloomberg

editor sat down with a delia's finance minister. italy's finance minister. round, of the first course it is very good news. let's wait for the second round. this is good news for france, europe and the global economy because france is set to embrace european targets and the european agenda. >> do you think this could mean a reforming european union? a more integrated eurozone them we have seen before? moore europe is needed, not just for monetary union, but thatto reassure citizens europe is about growth and jobs. something europe has not been delivering well on. to dothink the problem is with pushing that integration together which you have already been a champion of, which would

be easier than -- with macron than with alland. europe needs a strong reform agenda. europe needs a strong reform agenda. [no audio] >> the prospects of brexit are from this point of view -- how would you imagine he is different? you have worked with him for some long time. pier: i would imagine they would make very clear terms and europe will more easily reach a common position with -- vis-a-vis brexit. >> and that will be a hard brexit? pier: maybe a clear brexit without ambiguities. anna: the conversation talking about

honest about future turkey's membership of the block and round being talked down to. the plans to provide financial support for over 3 million refugees in earnest -- turkey have been left in limbo. -- 790 million. it has been a year. where is 3 billion euros? the visa waiver was going to be implemented last year, that is also gone. or is nothing to be seen. that is also not going to happen. in addition to all of this, we see finger-pointing in turkey with instructions to do this and not to do that, as if they are the teachers and turkey is their student.

that kind of thing won't be accepted by this nation. these won't increase, but with instead reduced demand for the eu in turkey. of course, our nation thinks this has been intentional. they can't say they don't want us in the union, they are trying to distance us with these actions. we aren't in a position to decide to exit it. we haven't entered. >> are you interested in continuing to push for membership or are you changing your mind? do you want to go a different path? what is your ideal solution? >> the invite the european union to honesty on the issue first of , will they continue to welcome turkey or not? i need to put this forth very clearly.

there are elections in members of the eu right now and the rhetoric is very different. we will see if those different types of rhetoric continue after the elections or not. therefore, the eu should determine a future vision for its self before these things can proceed on a healthy path. it should put forth the path that wants to walk on with turkey or won't. this nation needs to find out what's going on -- what goes on in their head. if they see religion, they need to put it forth honestly if they have an idea that a non-christian country has no place in this union, otherwise

there is no point in wasting time. manus: and remember, if you are a bloomberg customer, you can watch on tv as well as video streaming. you can follow all of the , follow conversations and join the conversation. click on the ask a guest a question. coming up, chinese turnaround as stocks rebound, find out why the pboc is upbeat about bad debt. this is bloomberg.

♪ it is 6:48 if you are waking up in london. let's get a business flash with juliette saly. juliette: germany is presenting

to buy generic drug maker acorn for $4.3 billion. the deal gives a stronger foothold in america with access to a network of retail pharmacies, outpatient clinics and hospitals. europe's biggest publicly traded health care provider made a -- a copycate version of technology drugs. akzonobel ifver of an offer doesn't bring the dutch chemical maker to the table. told he would take the proposal directly to investors if no agreement by june. shareholders meet tomorrow and some are in favor of the deal, including elliott management. called for thes trump administration to scrap its man on laptops and -- ban on laptops and flights to the u.s.

from the middle east. the ceo told bloomberg he remains optimistic. this is now all of the demand and passenger increase has been started and we hope to finish in increase of5% passengers. we are optimistic for 2017, now the turkish airlines start to take off again. juliette: that is your bloomberg business flash. anna, manus? anna: thank you very much. is toxury giant lvmh purchase christian dior. a value of 6.5 billion euros, but the story is more complicated.

we are joined from paris. great to have you on the program because this seems complex. tell us what is being done this morning. doing something investors have wanted for a long time. christian dior is a public company, he and his family on 26 percent. it didn't make sense, the stock is not all that liquid and arm with see it is in lvmh. these tworinging things together, combining them into one company essentially. it is a very interesting bid of financial engineering. the family owns a ton of shares in their big paris-based luxury rival. the family has been sitting on this investment for several years and are using those shares to pay for the purchase of christian dior. investorslicated but will be happy because they wanted this for a while.

manus: it would operably be happy. we will see what comes through. when you see the lvmh, there were good numbers a few weeks ago. there is a resurgence in confidence in luxury, isn't there with this global recovery? phil: yeah, things have been doing very well. the stocks in general have been this seems ag and good time. investors are fairly confident in the outlook. i am not sure why the timing is happening now but the backdrop is pretty good. anna: thank you for your time this morning. let's talk about m&a shall we? manus: jp asset-management with us. this is the luxury peace, we have the akzonobel, they will have to defend themselves. they have an agm today. m&a, where does it fit?

it is now a substantial theme of 2017. >> you have seen a big pickup of m&a in the u.s. and europe. tells you about the lack -- classic later stage of the cycle. that is one of the signals which tells us we are getting into the stages of the cycle when you see m&a really booming. whatnds to be part of contributes to that strong end of the cycle. though there are some signs of fraud in the market, it is not something to go underweight to early. anna: when you talk about -- we discussed reaction to political risk from investors and how they have been caught off guard by the risks around europe, but maybe not investing when -- and

regretting it later. m&a carries on regardless of these political risks. boardrooms transfixed about the politics of each individual nation in which they want to do business. althought is right, people sometimes wait until big risks are off the table before putting the bid through. generally, the m&a will continue for the next year or so. maybe a couple of years and that will provide support for a lot of companies, both in the u.s. but also in europe. manus: if you pull up m&a go on the bloomberg, you can see investment and the others. you can begin to see -- they literally just stuck on the deal. click off investment. it tells us the m&a for the euro , the dollar -- the strength of the currency just updated. dior, 13.1 billion.

the value of currencies is one of the important facets that drives these deals as well, is that fair to say? mike: definitely. if you have an environment with the euro that looks keen, you have sterling that looks pretty cheap on a global basis. who think in dollars are looking at companies in the europe and u.k. and that supports those markets. drill intocan europe, western europe, there is the u.k.. that is a lumpy bid. not allm sure it is driven by fx, but that has to be a major indicator. interesting to look at the industry -- energy breakdown. when he saw that drop in energy prices, people talked about m&a. we saw some in shale, for example.

non-cyclicals are the biggest sector we have seen this come through? we expected some consolidation in industries that get hammered by commodity prices. you will have some companies with strong balance sheets and a position to take advantage of companies who are in a worse off position. that is probably what you will see in the energy sector. manus: we can't let you go without this. i saw the china economic surprise. but the chinese market has wobbled. on a naughty step in terms of leverage. are you bothered? mike: we are becoming more worried about the medium to long-term picture about how this ends. you are seeing an incredibly rapid buildup that everyone knows about in china. to a head when the funding mismatch becomes an issue and at the moment, that is not a major problem. we think it is three years down

the line. anna: thank you for joining us this morning. mike bell. manus: next, we talk about marine le pen, ditches the national front and broadens her appeal.

♪ manus:

through in the you want. monthly gdps the estimate. china's economy is recovering. this remark is showing recovery. this seems to suggest a stronger

you want to be on its way if that is what you're after it needs markets. coming back strong against the dollar. manus: thank you very much. round one, the french election is passed. the markets rallied optimism. -- meant omicron will be a candidate. index closed at a record 20 month high. anna: at an effort to shore up more support, during le pen stepped down in order to be the candidate for all french people. -- stepped down from the national front party in order to be the candidate for all french people. it is with deep conviction that now is the movement towards -- to move from words to action. .t is essential for me

tonight, i am no longer the president of the national front. i am the candidate that wishes to unite all french people behind the project of hope and security. manus: joining us now to make sense of the markets is nick nelson. micron took a year to build from nothing. marine le pen is hoping to recast or in two weeks. what you make of the move? nick: i think it is sensible. you are looking to capture some of those middle votes that went to france off the on -- francois fillon. it makes perspective, sense. if you look at the polls, it seems to be that macron would beat marine le pen in the second round. anna: your view on european an updateeen, give us on how you are thinking it has innged or not by what we saw

the victory of him and marine le pen. nick: the fundamentals have been strong. we have seen pmi's in europe hit highs. we have seen earnings turn. that is what europe needs. we have had no cure -- earnings growth for almost seven years now. 2017 will be the first year we deliver on that. anna: we were discussing whether this is a window of opportunity before the italian vote. more of a concern for markets. is this? a window -- is this a window? nick: it is. we have got the french which we are navigating. we have the germans in september. election thatch

is the concern to external investors. they are the ones worried about politics. manus: we have jp morgan asset management in before you. the point that my cabel was making was that you have seen and exit last year from europe. this is a chart we looked at. risk came and was on the rise. there is no excuse now not to get involved. going but reaction is 92 risk, isn't it? risk, isn't it? the currency,

some of the options around the euro and euro-yen. in the equity market, we haven't seen a huge amount of that priced in. maybe people are getting tired of the politics. we have seen the trump and brexit affect. this is definitely a window of opportunity for europe where you can step out of the shadow of politics and look at the earnings, corporate profits, and things that drive equities. anna: what about the ecb story? we have seen a longer debate over the last few days. how long can the ecb continued to give the same messages? bullish messages from mario draghi the last time he spoke. when will it start to reflect more positive data coming out from your? -- from europe? nick: we are moving that way.

we suspect that is a possibility this week. after the elections in france, they may take a more neutral stance. september, they will move to talks of tapering. think whatou emmanuel macron is promising in that is the french pmi. germany is just on the turn. nick: it may be. we have had this in the u.s. as well. there is the soft data. it has been better than the heart data. look at retail sales. they have not been as strong. there is maybe an extension in those factors, but it is good news and seems to be widening out across europe.

germany has been the area growing strongly. that is good news. anna: is m&a big for you in europe? akzonobel is fanning of interest from the united states. nick: if you look at m&a , that was running at about half of the level of the u.s. europe hasn't. europe can catch up. europe,from outside companies are seeing the euro against the dollar at a 14 year low. earnings are starting to turn early in the cycle. evaluations are cheaper. you can find yourself incredibly cheaply. borrowing euros to buy european equities as the u.s. investor makes a huge amount of sense. anna: thank you very much, nic.

he stays with us. could trump to delay his border wall plans to avoid a government shutdown? the president's first 100 days draw to a close. this is bloomberg. ♪ ♪

welcome back. this is "bloomberg: daybreak europe pickup donald trump will call for cutting taxes on individuals and lowering the corporate tax rate when he unveiled his tax plan tomorrow. manus: trump will provide a broad outline for his tax changes, but will leave the details. he is backing down on his border wall. delay asking congress

to fund the project until december. the government shutdown. still with us, nick nelson. broader picture, every time we hear talk of lower taxation in the u.s., it seems the fire under u.s. equity markets. global investors get interested. to tony percent over corporate taxes, how do you view this issue? nick: it could be very material. if you think back to last year where we had the trump rally, this was superpowerful. we saw this aggressive rotation in cyclicals. since the beginning of the year, that has faded. we were thinking this might pause. $1 trillion in fiscal spending.

we saw him running to the .eality of government government is tricky. there are checks and balances in place. what you want to do and can do may not be the same thing. we have seen that come back a little bit. now, corporate taxes are back on the agenda. that helps corporate profits directly. we will have to wait and see. that would be part of the program, which would be a constructive boost for the u.s. and lifting global equities. there is another two years left in this rally. 25% over year one. there is a flow question to be had. you make an interesting point about what funds are doing. put that in context of this rally. nick: we have seen hedge fund net buying in europe hit a four-year high. go in an inverse

relationship in terms of where the market is going. it makes sense. we have seen strolling coming through there. is at a later stage than europe. our economic cycles have disconnected. profit cycles have disconnected. for europe, there is a window of opportunity as long as the u.s. hangs in there another year or so. --a: are the relations reflation trade still in place? nick: it has been mixed. you have seen some sectors outperform. iron ore prices have come up sharply in the last couple of weeks. we will have to wait and see whether they reconnect in the summer. manus: nick nelson, head of european equity strategy at ubs. anna: branch that reported first-quarter earnings that beat estimates.

joining us is the company's cfo. great to have you on the program. revenue talking about numbers beating the highest estimates. early april the volumes indicated continuations in the march trend. how strong is business right now? >> it is a pretty good quarter. we measure growth around christmas. we were a little bit careful. quarter one comes at around the same level. we see growth across the board globally. many segments contribute in. this feels like a pretty good environment. the conversation we have been having is the string of the

united states, the promises of tax reform by donald trump. the u.s. is near 22% of your revenue. what do you want to hear from the rest of the ceo from the president of the united states? robert: the u.s. is our biggest market. it is our biggest operation. globally, if you look at the impact the u.s. and have on our business, it is massive. the reduction of the corporate income tax is something we welcome, because we have a lot of earnings in the space. we have recently acquired monster, which is an investment in the digital space. to us, this is important. anna: another place we are watching with interest but ugly -- politically is in france.

seen political uncertainty at the moment? robert: we have seen lots of discussions between clients and ourselves. at the same time, the french market grew 9% this quarter, which was more or less equal to the previous quarter. impacted, but it is clear the french economy needs reforms. that is one of the two leading candidates -- is what one of the two leading candidates is planning to do. we welcome that. it is our second largest business we have. manus: is it important for you that macron wins? personify what you hope from macron? around your,u look

france is one of the most difficult markets to make adjustments. it helps you to understand the competitiveness of labor markets. if you look at how much we ,harge our clients for one hour it is just north of 20 euros. in poland, it is north of four euros. a good underlying mix. in portugal, it is eight euros. is clear.ition france needs to respond to that. i don't think it is going to go fast. if you look at any restructuring we went through in the past, it goes slowly in the french market. i am hopeful, but it is going to take time. anna: break to get your thoughts this money. we appreciate your time. rand's debt cfo joining us on the line from amsterdam. that will do it for "bloomberg:

daybreak europe. manus: stocks are bid. we have a feast of conversations. ♪

♪ guy: welcome. you are watching "bloomberg markets: the european open." i'm guy johnson in london. matt miller in berlin. let's talk about what we're talking about. dl ident trump wants to slash corporate rates 15%. the emmanuel macron rally up yesterday.