anna: breaking of the banks. president trump says he is actively considering a revival of glass-steagall. >> we are looking at that. some people want to go back to the old system, so we are going to look at that. we are looking at it right now. dodd-frank is going to be seriously changed, the banks can go back to loaning money. manus: racing for brexit. the british chambers of commerce calls for a frictionless future as the u.k. prime minister alludes to the meeting with shot clock younger headed toward -- jean-claude yunker. anna: france's final stretch.

le pen and macron go on the offensive ahead of the election. what is at stake. manus: a meeting of minds that milken, from u.s. treasury secretary steve mnuchin to citadel ceo ken griffin. we will bring you a bevy of top interviews from the conference in l.a. anna: a very warm welcome to "bloomberg daybreak: europe," our flagship morning show from london. manus: a very good morning to you. a raft of things to consider. one thing that the bond markets are doing just before steve mnuchin gets ready for a bond bank. they piled in, they added the most long positions, despite -- they have added the most long positions on a week on basis.

this is the first time since july hedge funds have been alleged across the curve. the question you have to ask -- there's always a good reason. economic surprises were lower, so they had all the reasons to maybe want to get along, and then bang, the new. let's bring up the risk radar, where we are on ten-year treasury yields. that was the longer-term picture in the shot. talk of the 30 year bonds -- sorry, the 50 year bonds, yields rising on treasuries, increasing borrowing costs, although there is some skepticism afor whether it will. come to pass. manus: i think that whole bond debate will come back as the fed begins to run down their balance sheet. theks are rising in asia,

msci asia-pacific the highest since 2015. you have south korea hitting records, markets closed for the next three days, but that ties into the nasdaq. anna: nasdaq was really on a tear yesterday, ending at an all-time high, tech stocks at the center of excitement. we covered the bank story around glass-steagall, that interview with president trump, talking about the possibility of breaking of the banks. but the nasdaq futures closing strongly. the futures is suggesting a flat open. manus: it's a record for the nasdaq. facebook and apple this week, and that will really set a tone. .2%, and it comes down to the big supply debate. anna: we will get numbers from bp later. let's get the first word news with juliette saly. juliette: anna, thank you.

u.s. president donald trump has said he would meet with kim jong-il and amid heightened tension -- kim jong-un if the circumstances were right. he said it could happen if it was appropriate, although his press secretary later said conditions are clearly not right at the moment. north korea has become the most urgent foreign policy issue facing the president during his first 100 days in the white house. >> yes, under the right circumstances, i would absolutely meet with him. >> and -- >> most political people would never say that, but i'm telling you, under the right circumstances i would meet with him. juliette: u.k. prime minister theresa may has alluded to the leaked details of her disastrous dinner with jean-claude j thatr to remind people brexit talks will be tough and she is up to the task. shocked att talks

her reluctance to compromise. it is said they disagreed about the complexity of the agreement, about the sequencing of talks, and budget contributions. in france, emmanuel macron and marine le pen kickoff the final week of the presidential campaign with major rallies in onis after weekend sparring subjects ranging from the euro to the environment. poll sees the latest the centrist candidate defeating his far right opponent with 59% of the vote on sunday. yesterday, clashes erupted between french anti-right protesters. police used tear gas after individuals through molotov cocktails. global news, 24 hours a day, powered by over 2600 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . as manus and anna were saying, it has been a pretty positive

session with a couple hours to go for key markets. thenikkei is supported with yen lower against the dollar for a fourth consecutive session. trading,g stocks but there's a dip out of chinese equities, and we are seeing that the leverage. the asx 200 is doing a lot better than it was before the rba left the cash rate on hold. if we have a look at the stocks we have been watching in the region, yamaha leaving the gains in japan. theas gained at the most on nikkei after passing a record operating profit, up 16%. one of the front runners in hong kong is rising the most since 2008 on a buyout offer. that you have genworth morgan insurance, the biggest drag on the asx 200, really leading and declines in terms of moving day average. if we have a look at this chart,

the rba left the cash rate on hold, as widely expected. - you can see all the factors playing into the rba's thinking. got a lot of have factors weighing on the australian economy, like low wages and the stagnant jobs market. rba not moving, looking for clarity when the minutes from are released later in the month. juliette.even early, manus: that happens to us all. let's talk about our conversation with the president of the united states. it was in the oval office, a wide variety of subjects covered. he addressed the possibility of breaking up the big banks. >> we are looking at that.

some people want to go back to the old system, right? we are going to look at that. we are looking at it right now. be dodd-frank is going to very seriously changed, and the banks can go back to loaning money. anna: meanwhile, speaking to bloomberg at the milken institute global conference in beverly hills, california, steve mnuchin weighed in on banking regulation. >> we are determined to make sure we have proper regulation, so that we don't put taxpayers at risk, but we also don't have overlapping regulation, we have priorities. banks and insurance companies know what they can do. manus: joining us now to make sense of the weekend's events and comments, simon french, chief economist at hand euro gordon. talking about a variety of issues, they have a deal done over the weekend with the government. also mnuchin thinks it will be two years before they get to 3%

growth. there's a lot of long talk over the weekend, very little new. >> there is very little to substantiate a 3% to 4% growth target, unless the white house hey been talking about -- t were talking about recent jobs figures, less keen to talk about growth numbers. that a place to the fact that the conversation now has a shift beyond health care, beyond the tax reform, towards infrastructure. you talk about long bonds, about the interview with gas tax to fund infrastructure spending, that $1 billion of infrastructure spending has gone quiet, and i expect to see more of that in the coming days as we key up a battle with congress be on september. anna: should we tune in and listen more to what the treasury secretary had to say on the subject of long bonds?

he was speaking to bloomberg at the milken institute global conference in beverly hills. >> we are studying ultralong bonds. that is something we are considering a treasury. we have a working group looking at it. we think it is something that could absolutely makes sense for us at treasury. anna: a working group looking at it. you can see the logic. but at the same time, other administrations have looked at this in the past, and some voices suggest riddick debility is what matters to treasury. they are really busy on capitol hill with other stuff, and maybe this isn't going to get through. >> you are right to say it is broadly tight, but i think maturity extension is a time when yield extensions are so historically low, and people are starting to back into u.s. government debt. as you will see, more concern in the far east, capital controls,

but also at the same time there's less protectionist rhetoric toward china. i think it would be a sensible proposal. manus: the other aspect, the dollar. if you look at the spread of the u.s. treasuries and u.s. yields against the rest of the dollar index -- look at that. it's the widest since march of last year. what impact will this have on the dollar, when you add everything together? this is a real yield, simon, in terms of the fed, meeting this week, no change is expected. but this could mean that the dollar has a big leg on the upside. >> it does. theirhy i think, for all bullish talk, the fed are more likely to move -- there's still that 3% to 3.5% yield for interest rates. i se struggle to see that in

this environment. look at where the boj said in recent sessions, keeping guidance unchanged, or we are years away from that. that versions, which we have -- that divergence, which we have been talking about, is alive and kicking. anna: does that mean that if you're exposed to emerging markets and fearful of a stronger dollar that you should be concerned? i was reading a great these on the bloomberg today, quoting robert louis stevenson, saying the world has a grand memory for forgetting. aroundcally, he focuses dollar-denominated debt. >> yeah. $3re's anywhere between trillion and $4 trillion in emerging markets and that is going to be a painful headwind

in emerging markets. that the kindaid of nominal movements we are talking about,, independent of changing.are not game if you look at the nominal comparisons of the late 1990's, we are nowhere near significant. manus: part of the reason they are saying mnuchin is flying this kite on 50 year bonds is because the fed wants to get started with juicing the balance sheet. is it a marriage made in heaven? i give you a paper which settles reduction in the balance sheet? well the last time they muted, the violent reaction from markets -- you talk about the pulldown, which really started about two months ago, and we continue to see the pace grow, i thinkve use, and

anything the administration can do to support the said in an orderly market has to be welcome. anna: on the banks, we started the program with comments from president trump around bringing back glass-steagall. is that something -- >> i dismissed that as campaign rhetoric at the moment. there are a lot of broken promises already. anna: simon french stays with us. manus: we have got a little bit more with the purchasing of square. this will be an exclusive. anna: and we will be speaking to martin gilbert at 10 past 9:00. manus: coming up, manufacturing miss. we check on china's disappointing pmi data. what kind of signal for the country's growth? this is bloomberg.. ♪ \

anna: welcome back. 6:17 in london. let's get the bloomberg business flash with juliette saly. juliette: anna, thank you. subpoenaedsecutors several banks as part of a criminal investigation into possible manipulation of the u.s. treasuries market. according to people familiar with the matter, ubs, bnp paribas, and the royal bank of scotland received subpoenas last month. one person said morgan stanley has also received a subpoena. representatives for ubs, bnp paribas, and the treasury department the client to comment. rbs didn't respond to requests for comment. activist investor elliott management is meeting with bhp billiton shareholders in australia as it urges the company to overhaul its businesses. according to a person familiar with the matter, they are going over details to emerge bhp with other shareholders. a spokesman declined to comment.

the british chambers of commerce have issued their demands to the next government, itss priorities and manifesto, for a "frictionless future trade arrangement" with the eu. no new business taxes for the next new parliament, and delivery of investment and telling medications infrastructure. it wants protection for your nationals in the u.k. and an immigration system that doesn't cut companies off from labor. there is a says bump due to the presidents we use of the social network, but the company would love it if every world leader used tweets. twitter reported a jump in monthly active users last quarter, but admitted won't translate right away to increase revenue. >> as we said in the earnings call, we don't today have visibility on seeing the revenue

trend improve. first, we need advertisers to recognize the significant increase to our ally. we are much more attractive than we were months ago. we need decisions on what was spent today. not only is our audience accelerating, our prices are down 60%. juliette: that is your bloomberg business flash. manus: thank you very much. let's turn our attention to china, with manufacturing pmi at 50.3, below expectations. above 50 reading still points to expansion in the manufacturing sector, but a slow pace, suggesting that 2017 could be passed. anna: the u.s. treasury secretary at the milken institute global conference in beverly hills was asked about the relationship between the united states and china. >> the president has made it very clear that the number one priority is to have them help with north korea, and that is something they are doing.

manus: simon french is still with us. it's an interesting weekend. it doesn't bode well on the headlines for china. is it disconcerting? if you look at this, we have big company pmi's fading, but the small pmi's are doing quite nicely. have you read the data? >> on the large company side, more affected by two aspects. a bit of a clampdown in credit markets, further clampdown incorruption efforts on the administration. but you have to bear in mind 1 lastcond factor, the q year were very weak and we saw enthusiasm. it starts to get harder from china here on in, with people looking at order books and and itng year on year,

becomes harder given the scale of expansion and reflation trade mostly routed to fiscals. anna: is part of the reason for some weakness in recent data in china attributed to the ambitions of the government produced leverage? lots of people talk about the long-term necessity, but as long as they can get away with it -- that looks set to continue, doesn't it? that long-term leverage without much short-term headwind, it seems to be a goal. >> it's a goal, but history is waiting against them. the ability to manage the business cycle, and let's give the chinese authorities credit -- they managed to business cycle at the start of 2016 at a time when markets were very concerned about the growth trajectory. that had the policy levers to do it. the question is if they hit turbulence a second time around,

can additional government stimulus be initiated the second time around? it gets harder each time. manus: looking at dollar-yuan, 6.8951. the pboc have actually reduced the yuan, the longest run since november. the question is, it will get harder for the pboc to match the fed as this data weakens. >> yeah. meanwhile, we don't expect the fed to move this week. it's almost inconceivable they won't move again this year, and that becomes harder for the pboc, who might want to go in the opposite directions if those earnings signals are weaker. are they going to decouple, and see that fresh hold? it was predicted, myself included -- a cornerstoneains in export promotion.

weaker yuan policy remains a potent policy response to weakening pmi. anna: and that is not something we see sustained as the congress approaches. this is where we see a bit of a reshuffle in terms of who holds power in the lower echelons of china. that seems to be coming through, the government won't want things to deteriorate too much. >> you have to be caught and sent, don't you -- cognizant, don't you? the question, the coordinated altogether,q1 2016, will it be more subtle this time? mindful, as we said before the break, about the amount of dollar-denominated debt? or will it be the fiscal that will come to prominence, and the

exchange rate movements will start impacts large companies where pmi is weaker? manus: when you like at u.s. gdp, at chinese growth numbers over the weekend, and i know what you will immediately say -- wonder, are we at a rollover point in terms of the great reflation, great growth story we have all hoped for? >> i don't think we should have hoped so dearly for the great reflation trade. manus: christine lagarde -- i do everything christine lagarde says. [laughter] >> we can interpret that many ways. the challenge, really, is becoming, hasn't done a structural break with the last seven years? for result of enthusiasm new administration's new sets of policies,, the end of deleveraging with lots of governments on the balance sheet? i don't think we have. i think it has incrementally improved the growth profile, but

we got overly enthusiastic last year. this is just an element of reassessment. the structural stagnation is not dead, just deferred. anna: some suggest we are seeing stronger, decent earnings from the united states, that the run-up we have seen inequities in the u.s. and elsewhere is to do with not trump but the global growth story that we have already seen, that has been delivered up till now. >> i am happy to be on the other side of that trade. we still have chronic overcapacity in almost every market. until you see a reassessment of global capacity, we won't to move from the deflationary mindset. the greaton, deflation story temporarily on the sidelines. simon french stays with us. anna: 6:26 in london. coming up on the program, bill ackman will be speaking to the

daybreak team. exclusive.bloomberg don't miss our interview with the citadel ceo ken griffin and his take on the possible breakup of banks. this is bloomberg. ♪

i've spent my life planting a size-six, non-slip shoe into that door. on this side, i want my customers to relax and enjoy themselves. but these days it's phones before forks. they want wifi out here. but behind that door, i need a private connection for my business. wifi pro from comcast business. public wifi for your customers. private wifi for your business. strong and secure. good for a door. and a network. comcast business. built for security. built for business. ways wins. especially in my business. with slow internet from the phone company, you can't keep up. you're stuck, watching spinning wheels and progress bars until someone else scoops your story. switch to comcast business. with high-speed internet up to 10 gigabits per second.

you wouldn't pick a slow race car. then why settle for slow internet? comcast business. built for speed. built for business. manus: it's just gone 2:30 in the afternoon, a beautiful day over the emperor's palace. dollar up at 1.97, and yen down for the fourth day in a row. that's the longest losing streak on yen since the second of march. a little more proclivity for risk. let's talk about the markets and some records being set. nejra cehic has your market check. nejra: good morning. speaking of risk, the cost has risen as much as 1.1% today in today's session for passing the record close it reached six years ago to the day. it broke out of

the range that earned it the nickname boxby. its foreign inflows, political and geopolitical risk, not to mention the challengers. you are seeing broad-based gains across asian equity markets as well. they are moving on to aussie dollar. the rba keeping the key rate unchanged, no surprise. but keeping it to technicals, the blue line is the 50% fibonacci line, getting fairly clear support. if the rba had surprised we might have seen this move through the support line while hawkish comments may have seen the aussie dollar move toward the 55 day moving average. as it is, hasn't done a lot, no surprise. then we've got a look at u.s. treasuries. steve mnuchin providing the clearest signal yet the possibility of issuing ultralong bonds, saying on bloomberg tv

that it could absolutely make sense. it pushed yields higher across the curb, and they have held those gains today, yields holding above 3%. we are seeing some curve steepening, the gap between five-year and 30 year yields reaching its highest since february. and i want to show you oil, brent has also fallen below the 200 day moving average, along with wti, oil trading near a one-month low, the u.s. gasoline supplies causing concerns. anna: thank you. in an exclusive interview with erik schatzker, citadel ceo ken griffin says he would be both really excited to see a breakup of the big banks to increase competition and boost the economy. this follows comments from president donald trump, about bringing back a version of the glass-steagall law. the globalpoke at conference in beverly hills.

>> it is way too early to tell. feet,of all, at 100,000 the move to reduce regulation in the united states i applaud,. this is the single greatest lever they can pull to get our economy to go back. if you recall, i started my business in a dorm room at harvard. $255,000 and i could launch a hedge fund in 1987. you can launch a hedge fund today with less than several hundred million dollars, given the high cost of compliance and other regulatory matters you need to deal with. that has really discouraged new business relations and asset management. it's a burden. space, the transportation space -- weightede in america, regulations reducing new business formations in america and that is a tragedy. the

administration's focus on reducing regulatory burden on the american who has a dream, i applaud that vision. was veryadministration interested in introducing more transparency to the bond market. what about this administration? i really hope they follow through on that. transparency is what creates confidence. confidence that you have been treated fairly, that you understand what is taking place in the marketplace. transparency is the underpinning of a healthy capital market. in a market that's opaque, the incumbents enjoy the information advantage. but that doesn't make for a good market. so if this administration continues to carry that baton forward and shine light on how treasuries are placed and trading, that would be really good for the entire market. and if they don't, i think it's unfortunate. in particular, when bills we are looking at, whether it's reform for obamacare, infrastructure

bills, we are taking our deficit higher. and i think it's really important that we take steps and continue to drive the u.s. fixed income market and the u.s. treasury market to be perceived as the most liquid, fairest market in the world. that will drive down the cost of borrowing, which will benefit and save money for every american taxpayer. today, president trump told my colleagues in washington that he is taking a serious look right now at steps to break up the big banks. would you be in favor of that? >> i would. i believe that when the market becomes overly concentrated, you reduce competition, and competition is the lifeblood of what makes a free economy work. when you have many firms that are vigorously competing to get ahead, that is when you create innovation, and that is when consumers win. erik: in the financial crisis of

2008, a number of decisions were made very quickly that resulted in a massive consolidation. i don't think that serves the interest of our country well. i'd argued to break these banks into many small banks -- that maybe separate the investment banks from the commercial banks. i'd be really excited to see that. erik: you think it would be good for the economy? >> i think it would be good for the economy. erik: for your firm? >> a mixed blessing. we would have more vigorous competitors, but i think that's good for america. i think american investment banks are at the forefront of innovation. not all innovation is good, but over time, the majority of innovation creates meaningful value for our country. anna: that was erik schatzker with ken griffin. manus: the french election is less than a week away, with the two candidates providing stark

alternatives to the future of one of europe's biggest economies. at the end of the final days of the campaign, emmanuel macron and marine le pen have been turning up the heat. >> [speaking french] >> mr. macron, i am telling you, the outgoing candidate. since december, french people thought they had gotten rid of francois hollande. that president to failed france. and there he is, back through the window. >> [speaking french] >> i know that many will vote for me on sunday, may 7 to counter the national front. a characteristic of the second round of democracy, and i want to tell them that i respect that, and i am fully aware that on may 7, i am doing more than promoting a political project. i am fighting for the republic and for a free democracy. anna: polls show that macron is

with fort runner in support of roughly 60% of voters compared with 40% for le pen. the milken institute global conference in beverly hills, two people weighed in on the election results. >> [speaking french] >> i think mr. macron will win the election, which will be a good thing for democracy, and i think he will need to form a government who can enact laws an in parliament. he needs a majority to get that done. manus: those are the voices in the last few days of campaigning. this french is with us morning. we are in the last her raw, and back -- the last hurrah, and he talks about monopoly money, what she's promising is imported

goods, your television the telephones will be more expensive, right to the bottom line. challengingly thate le pen's thesis damaging globalization can in some ways be ignored or reversed, and trying to build together the economic argument he isthe last few days, trying to position himself as theanti-front nationale, strong and stable leadership. what you have by contrast -- whereas marine le pen is moving toward the center, trying to close that gap of almost 20% by appealing to a moderate voter, by saying that you are voting for five more years of francois e, but that's given

unlikely to close the gap. anna: what does the broader picture for europe look like, then, as we go into this busy year for elections? we have had the ecb, mario draghi, characterizing things as having improved, talking about how we have gone from fragile and uneven to solid and broad. which isare two bits, the inflation story, core inflation stock around 1%, not going anywhere fast, a lot of that base effect from last year. but also somewhat of a jobless recovery, and this is one of the things you are seeing in the french election. corporate earnings have picked up as headline pmi's have picked up, and we haven't yet seen that material moves down in employment. anna: and they having knowledge

that weakness in inflation, which is why they are baby steps. >> yeah, correct. one must reassess the macro economy quickly. we spoke before the break, the central stagnation. the structural problems in the eurozone haven't gone away. a very weak euro and growth story. they have just been deferred, buying more time for the necessary structural reform to take place. thingsre the kinds of which exceptional policy buys you. manus: there has certainly been an uplift. some of the data has improved, but as far as --porate euro is concerned if it's fed back into the system they can have quite a dramatic accelerator effect. >> correct. whathether it strengthens is required, the convergence of

the eurozone state, closer fiscal and political cooperation, or if it gets fed back in terms of dividends, the inequality underpinning the populist movements, and eventually it will lead to political fallout, leading to the break up of the monetary system. the thing i have seen in the last 12 months has changed that view, unless the distribution changes. anna: so it is still your core view, despite what we are seeing from macron and marine le pen? >> macron has the better t as i havelicy, bu said a number of times, either we turn left for more fiscal integration and political integration, more europe, or you

turn right and you move the european monetary system to a northern core, which is more aligned, and a periphery that goes its own way. anna: it seems that the french voter doesn't want to vote in favor of a breakup in the eurozone. does that matter? if not that -- >> a vote for macron is a vote in favor of the euro. polls there are opinion me, if youstaggers look at the economic damage that has been done with the single currency, not only in france, but greece, a series of countries that haven't grown in 15 years. you go, the intolerance, the continued adherence to the monetary doctrine, is nothing short of staggering. manus: thank you so much. seven french stays with us on daybreak. and we bring you big interviews

throughout the day. bill ackman joins the show at 10 past 7:00. the reminder -- if you are a bloomberg customer, you can watch everything we do. go to tv . you can follow all the chart and functions and join the conversation, ask a question. anna: if you think you have a question, get in touch. coming up, a disastrous andunter with juncker, theresa says only she can get breakthrough brexit. strong and stable leadership is thae phrase. we will talk about that next. this is bloomberg. ♪

anna: welcome back, everybody. 1:47 in new york. let's talk about twitter.

manus: twitter has told bloomberg that it's seen a bump in extra heavy-duty president trump, but it would love to see other world leaders be so connected. they announced an expansion of the existing business partnership related to streaming video. anna: the coo and interim cfo, and emily chang asked him about his role. >> the first thing i would say is i love working with jack and the rest of the leadership team. we approach running the company as a team that is focused on specific priorities, and we divide and conquer against those priorities. we divide up the priorities amongst our team on what's important. i wouldn't work with anyone else but the team i working with now including jack,. he's an inspiration. saidr first new fund, they

that she just delivered the heart and soul of what twitter is. i live in breathe every -- i live and breathe every day to help that vision come to life. he couldn't be a better partner and our teammates couldn't be stronger. emily: what is it like working with a guy that the ceo of another company? >> it can be daunting and inspiring. jack is there for 100% of the decisions. he has insight and has a to make decisions that none of us could ever make. it's a powerful relationship to have with the company, and i think it has made us better that he has been at the helm. emily: we talk a lot about the potential drawbacks of running two companies. are there any benefits? >> it's funny, the media wants to ask us about it. i don't ever think about it until the media asks me. when we have somebody to talk about, we talk about it. when we have something to discuss at the team, we discussed as a team.

we are there for 100% of the decisions. emily: you are still looking for a cfo. any progress? >> once we have news we will share it. ok.:y: twitter hired banks. what's the latest? >> the latest is we haven't commented on that situation will stop they support the strategy we have and the plan we have in place. quartersecutive of user growth. i have been around the internet sector since 1998, and companies come and go. i can count on one hand thae companies that saw deceleration in 2014 and then to re-accelerate is an accomplishment and i couldn't be prouder of our design team. do.ave a lot to we are still at the beginning of the beginning.

we haven't come close to come pushing the long-term goals that we have. we will be resilient along the way. we will recognize the missteps. emily: you see twitter as an independent company? >> i see twitter as a company that can have the largest impact on the world from any company, economically and otherwise. manus: a smile from emily chang with the cfo of twitter. will they remain independent? anna: 7:51 in brussels. lastclaude yunker left week's dinner with theresa may skeptical about reaching an acceptable brexit deal. manus: that's according to a report from a german newspaper. the prime minister said the talks would be tough and she alone is up fo rit. -- for it. anna: we have a busy week in u.k. politics, all kinds of maytions taking place, and may not get attention very often

but some could be seen as a key test of how this pre-election campaigning is going. >> a month ahead of the general election, 34 english councils up, we are expecting a significant swing from the labour party to the opposition, quite unprecedented. normally you see hidden opportunities to kick the incumbent government but it seems the other way around, a decent signal toward what will happen on june 8. manus: the leader of the liberal democrats -- we all watched theresa may slug it out politically. tim faron expects a colossal coronation in this election run. there's a lot of presumption run about what kind of margin theresa may could have in this election. >> yep. most people thinking 80-100 seat majority, and right now she's

got about a 15 seat majority now, so a massive increase. is quite interesting with the leader of the liberal democrats, an increasingly the labor party snp, this is an opportunity to vote in your local area, to stop the conservatives having a free hand. that's the level of expectation management going on amongst the opposition. we don't expect to win, but don't stop the massive triumph by the incoming government. faron outcome painting in my constituency yesterday. manus, you pull up an interesting chart -- this is the uncertainty indicator around the u.k. economy. making the point that it went is at --nd brexit, but

not all of that uncertainty is registering. >> the reason i like this chart is because it puts into context why sterling has had a revival. the magnitude, as i have spoken previously, of the changes in sterling on previous occasions where the u.k. has had economic turbulence, and you look at 1970's, sterling depreciation peaked at 25%. we have 21% thus far, a bit of a bounceback. i think that is consistent with the fact that there is economic uncertainty in brexit, although not as acute as the events i mentioned. manus: are you surprised to sterling didn't get more of a slap on the back of he said/she said, he's deluded, and they don't want to pay? i'm paraphrasing. [laughter] manus: with a little bit of

information and skepticism. skepticism.n and >> people are still unwinding their parity that's. go back a month, they were saying sterling was going to parity -- election,sted general house after house pulling back euro-sterling, and for investors responding to that, taking a less bearish position on sterling. is certainly a basket of goodness in the u.k. and the post-brexit world, and there's an overly bearish sentiment. manus: the function for projection, fourth quarter of this year, 1.24. through the next year, 1.25. no great swaggering call to side. >> no. that is part of a two-year process.

where the headlines we saw about a bad dinner leaving a sour taste in the mouth will continue, there are many , thereg axes going on are multiple headlines that will be designed in deliberately media,ed to a patient designed to strengthen their negotiating hand and horse public opinion the one direction or the other. that is why cable has really reacted. anna: that's what we have to look forward to. simon, thank you so much. simon french. and we've got big interviews coming up. bill ackman joins the team in just under 10 minutes time. manus: that's coming up on

daybreak europe. we will be down to the london stock exchange. francine lacqua will be speaking to bill ackman, next. ♪

manus: breaking up the banks. president trump says he is actively considering a revival of glass-steagall. there are some people that want to go back to the old system. looking at it right now as we speak. dodd-frank is going to be very very seriously changed. it for clinton -- a frictionless future to last week's class. the brexit talks will not be easy. and macron on the offensive had of sunday's

election. u.s. secretary steve mnuchin. a host of topics from the conference in l.a.. ♪ manus: "bloomberg daybreak" europe is our flagship show. i manus cranny. i am anna edwards. --anna: i am anna edwards. 1.5 one billion. that is significantly above $1.51 billion. news for the team, dividend remains at $.10. production 2.38 8 million barrels per day.

i have seen a number of over 3 million barrels a day -- a day. we have the adjusted first-quarter profits. good news in terms of being able to continue to pay the dividend without increasing the leverage. 55% above what it was in 2016. on the beachn, all side. the first quarter of 2017 and it it is a 7 -- substantial one. exxon, chevron beating estimates. we are getting numbers from aberdeen asset management as well. half,venue for the first just a touch above the 529 million. is on track and they

will be joining the bloomberg team later on in the programming. manus: futures, we have got those in focus. hsbc has a buy recommendation of we're up at a 10th of 1% in london. the rest of your visit troubling that little bit. federal reserve, the jobs report, we have a whole host of reports from apple to face -- to facebook to come through in terms of driving the market. corrects on the 10 year treasury of course we saw movement in treasury yields on the back of steve mnuchin talking about long bonds over the united states. evaluating -- some skepticism that we will see it come to pass. it has only been discussed and

yields going on to their games in the global scene for the past 12 hours. corrects another record for the nasdaq at the close of trade last night. we're still in the green, that is the principal in the points. you have technology driving apple and facebook. a hint of caution in some reports in terms of apple. the supply store in the united states of america where the market really focuses on them. corrects a couple of markets closing up this hour. -- is closing up by .7%. effects in australia down by .3%. no change in the rba. did not move it all that much. manus: these are the futures indicated. you have the equity markets rising by .1%. on markets in the opposite direction.

, 149.16.h bond macron accusing le pen of using monopoly money. bloomberg business flash. here's juliette. donald trump said he would meet with kim jong-un amid heightened tensions. if the circumstances were right. speaking to bloomberg he said it could happen if it was appropriate although his press secretary said conditions are clearly not right. north korea has become the most urgent foreign policy issue facing the president during his first 100 days in the white house. president trump: under the right circumstances i would absolutely meet with him. most political people would never say that but i am telling you under the right circumstances i would meet with him. : theresa may has eluded

to her dinner with jean-claude juncker to remind them that brexit will be tough. the european commission president left talks at -- on wednesday shocked at her reluctance to compromise. the pair displayed at the complexity involved in any agreement and budget countries and. emmanuel macron and marine le pen kickoff the final wake of the presidential campaign with major rallies in paris after weekends -- ranging between the euro and the environment. defeating his far right opponent with 59% of the vote on sunday. yesterday clashes erupted between french anti-right forces and protesters during a made a rush -- mayday march. individuals through molotov

cocktails. spending cutsid and the increase in oil prices are helping gulf nations lower the highest budget deficits. progress in efforts to transform economies that reliance on oil and gas for more than five decades. >> oil is one of the main commodities that determines. the good news is not all the economy has grown. despite the fact the government has done over the last 2-3 years. plans orof economic registration plans, progressively paying off. more of that will help diversify the economy. >> spacex has successfully launched the fifth mission of the year putting a spy satellite

into orbit and bringing a rocket booster back to earth. it lifted off after being delayed for 24 hours because of a sensor issue. the first time spacex has worked for the defense department. worth $70d will be billion. dayal news 24 hours per howard by more than 2600 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . the close-out markets in japan and australia. .7%n closing higher by ahead of public holidays for the remainder of the week. the weaker yen really helps export stocks and japan's. hong kong doing better than that an hour ago. weakness coming through in china while australia's market has closed lower. there have been a number of stocks watching, yamaha rising

significantly. a record operating profit sending share prices up by 17%. rising since 2000 and eight, after receiving a offer. i mentioned the rba has left the cash rate on hold at 1.5%. the surprise there. if you check out this chart, you can see the rba is really struggling with a number of things. the strong aussie dollar. inflation starting to get back into the 2-3% target band the rba is looking for. it does not seem likely the rba is going to raise rates anytime soon. weaker laborgot a market and stagnant wage growth as well.

the moving day average showing the aussie could get 276 u.s. cents. looks low.investment no real surprises there. manus: thanks. square, a rough couple of years. record returns followed by record losses. one man has the answers. he joins francine lacqua right now. good morning. francine: this is a very important day in the quest for pushing a square bill. think he so much for joining us. here on the london stock exchange, why. >> more liquidity, narrow a discount. we launched pershing square 14 years ago. a long-term plan of hours. nuven -- we have been trading at a discount for the value of the assets. we're going to have more

liquidity, access more investors. become a ftse 250 eligible company. as early as june. >> in the past you have been unhappy with the discounts. have you expect that to be adjusted press best? >> 12 present demand is old people who follow index funds. funds, englishn lang which dominated entity. a bit obscure in amsterdam. a number of people say look we can't invest in a company based in amsterdam but if you have a pound denominated one from the u.k. you have a lot more investor interest. we are adding additional venue. >> it is a broader type of investor? >> that is correct.

>> talk to me about buybacks. >> anytime you can buy back your liquidwe own 11-12 very north american companies. it is not difficult for us to determine their value. can buy them back in the markets. we think they are cheap as is and you can buy them at a 15% discount. >> what do you think the intrinsic value as? >> a lot not something we've ever quoted but our strategy is to earn. look at pershing square holdings over a long. of time. a company launched 14 years ago. for the first 12 years of that history, we generated 21% return on equity. then we made a really bad acquisition and we brought the return equity down to 15%. it went public october 2014.

it traded close, as a result of that acquisition we dropped a significant discount. >> 30%.d across -->> what did it cost? >> 30%. you look at the ftse 250, the .eturn is something like 13% garrett company trades at a multiple of that. we traded .85%. web rates like an investment holding company. we don't take corporate level tax. >> this is clearly what you think, give me a sense of what you learned from valeant.

>> it can be expensive. historically we have bought a large stake in a company, joined a board of directors. had big decisions that a corporation may. valeant, we were buzzing with a management team and in 2014 every transit -- successful -- nottion, we made being on the board we could not see what was going on. that was a big mistake. you will stayean away from pharmaceutical companies? >> probably but people look at chipotle, we bought a stake, joining the board. just drawn from a fort resigned. the very successful investment so far. stock has gone from 400-400 $80 per share. -- 400-480 per share.

>> are you happy with the succession plan their? >> we don't know the succession plan. we think it is a great business, a huge opportunity. do you have a succession plan that would be beneficial in your mind for the company? >> find the right ceo. >> you have been very focused on a couple of companies. being more diversifying? >> we are a big believer if you think about pershing square holdings people think of it as a fund mark looks closer to a investment holding company. the problem with a typical investment holding structure is a concentrated collection of companies, and extra layer of tax of a time they choose a business.

restructured as a fund so that investors can avoid the layer of taxation and operate like a holding company. --- 10 quality businesses. help management make smart decisions. that is basically what we have done for a long time. we have one short. >> you have one very long. >> with many companies we really like. >> was your favorite. >> i don't know i have a favorite. mac they headline yesterday that they expect to take up the issue toward the end of the year. where wehoward hughes built the company from scratch. a very successful restructuring

where they got to keep their interest in the company and we took 30 assets out, already management team, picked a name, built the board of directors. we have been a shareholder approaching eight years. six years since we became public. favorite 20, in the+++ >> do you think trump will actually help? >> the company has had sufficient scrutiny. this is a significant day for

her life. the ftc find the company. they required them to restructure the business. i can't because we make revisits its. t.we may revisit it >> is a business we may repurchase. if you look at the increase in price versus the price we paid, it has been something north of 20% over a 13 year history. my point here is if you want to we our hidden investments, own chipotle today at the market price. you can buy it at 15% discount. you can on it through pershing square at 37 $.5 per square. >> how much does it have to do with the pound? >> i don't think it has any impact. it is a translation issue. you are not creating holdings at a discount.

in terms of buying the pound. we aren't u.s. dollar denominated assets. the benefit of the bound -- the pound lifting is it opens it up to investors. biggest thing you think it a company you're eyeing at the moment. >> to potentially very large investments that are consistent with pershing square. our large companies, very high quality businesses. very well over a long time. underachieved in their potential. the of not been optimized in terms of the way they are operated. we think there are changes that could be made to make it more 50. after making investment. >> anything? >> if you would like to own them , by pershing square holdings. and you can own what we are buying at a discount. >> thank you so much for the interview.

book, we will see our guest over the next couple of weeks or months. back to you in the studio. thank you. pershing square capital management founder and ceo. the numbers for it 115 $1 billion, above the estimates. billion, the$2.7 man who can help us digest the summers. you're making a point there. not enough cash to cover three big issues. the gulf ofand mexico. >> if you were to look at bp as exxon has reported, these would be very good. they have increased net income. undergone -- has best -- has gone up.

dividend and the need to continue the gulf of mexico ability. limit thatch in the bp is comfortable with, the is --that bp owns previous quarter 26.8%. this quarter is 20%. another quarter -- 28%. you will have a situation where bp is going to struggle to keep its ratio under its parameters. tries to get more cash out, gets its bills down, or the guidance around the balance sheet? >> bp is hoping for higher oil and natural gas prices. that can help. the second half of the year will probably have more production

because that will help. level of reducing could be there. the company is saying the 215 -- 15-17.17 i think that company is very likely to keep it that way. manus: is it going to stick on the lower end of the expenditure? above for all of these oil majors in terms of their production. that is critically important to them as well. >> the oil price will go to $50. bd have a problem, the whole -- the whole oil segment will have a problem. bp, bp is the, one that really needs higher oil

prices to help us because of the special situation that they are paying mexico. they know they needed to pay it. thank you very much. french election is a week away. the two candidates arriving for the future of one of europe's biggest economies. manus: you have macron and marine le pen turning up the heat. >> mr. macron is the ongoing candidate area since december french people thought they had gone rid of francois hollande. the president who failed france. the president to never presided for the people. my the see him leaving door and there he is back through the window. i know many will vote for me on sunday, may 7 to counter the national front.

it is a characteristic of a second round in a democracy and i want to tell them that i respect that and i am fully aware that on may 7 i am doing more than promoting a political project. i'm fighting for the republic and for a free democracy. great to have you on the program. we are into the final days of campaigning. really trying to reach away from their bases i guess. contenders support base. >> between them they have 44% in the first round. in order to win they have to extend their base. he has been more successful. she is held back by her views on the euro. that seems to be the main thing that prevented supporters of feel. macron has been

hitting her hard on electronic her party, the the public pass. for the moment macron has a much easier sell in terms of winning over the people who did not vote for him. the polls have been narrowing. he was credit suisse 64% a week ago. now it is 59-60%. the hard work begins after he potentially becomes president in terms of enacting his program. he does not have the political base to do that. >> exactly right. that is the case with both of these people. the two main parties that have dominated french politics for the past 50 years pretty much. the socialists and whatever you want to call the center-right. they do not have a presidential candidates. go to elections in a june and the french president has a loss

of power but only if they have the majority in parliament. you have two candidates who don't really have real structured parties behind them capable of winning a majority in parliament. we are likely to see the socialists and republicans come back strong in the legislative election. -- auld have a very mixed withoutbled parliament the president having anything close to a majority. anna: thank you very much for your time. joining us in paris. bloomberg markets, the european openness of the next. -- the european open is next. manus: the pairs market at a nine-year high. the last week of elections in france. the first quarter, adjusted net income has $1.51 billion. they still won't have enough cash in the bucket. it would be great if they did

not have to pay the government of mexico. operating cash flow 2.1 billion. martin gilbert speaks to bloomberg later on today.

♪ >> you're watching bloomberg markets. up cash session coming shortly. matt miller not here today. let's talk about breaking up the big banks. president trump says he is considering reviving glass-steagall but separate investment banking from retail. given what we have seen, how much of a political priority is this? long shot.