>> oil wide-out. $45. features drop below >> decision time in france. ron continues to lead the pen. -- le pen. >> the conservative party on course for a big victory. obamacare repeal and replace bill passes in the u.s.. after several republican senators said they will write their own version.

>> a very warm welcome. i am anna edwards. said, why about in terms of the oil market. what are the consequences of commodities? look at this? . you have that economic surprises. the commodity index down four days in a blow. oil down 11% this week. there was a lovely piece, if you are long commodities, our condolences. that is an understatement. anna: we have seen weakness in the commodities space.

prices down another 3%. a focus on the oil price. it is interesting to debate whether this is about demand, specific commodities, or the chinese growth story. broaderisk radar, the commodity story. here we have got the iron or ore futures, down 7.7 percent. a weekday yesterday, down. they aussie dollar. the worst performing currency after the canadian dollar. heading for another legally -- weekly loss. market, the question you need to ask yourself as you look at iron ore futures, these

moves are not the harbingers of recession. we have gone from an upbeat view temporary reprieve. turning it over to stocks. china also under pressure. asia-pacific, down 0.8%. days of losses. you are seeing a real momentum, coming into the market. anna: japan and south korea closed. these are the features. we have the payrolls number. markets shrugging off what we are seeing in commodities. got bonds trading

picking up overnight. in the u.s., house republicans have mustered just enough votes to pass their health care bill. that salvages what at times appeared to be a doomed mission to repeal an harshly replace obamacare. it stands little chance of being passed in its current form by republicans in the senate. the plan would cause millions to lose health insurance. >> it has been a catastrophe. this is a great plan. i think it will get even better. replacea repeal and a of obamacare, make no mistake. >> the public will now see what they have gauged their name to. name next to, you

are paying more for less, and we will make sure the public is aware of that. meanwhile, donald trump and the australian prime minister seem to have passed of differences. they appeared together aboard aboard antrepid cemetery market the 75th anniversary of the battle of the coral sea. in the u.k., early results in election suggests theresa may's party is on track for a sweeping victory. across the 19th english and welsh counties, the tories had a net gain. lost 117. the ukip had failed to win any seats. that of course supports the prime minister's bid.

powered by 2600 journalists and analysts. you can find stories on the bloomberg. it is the closeout of some of the markets. getting close to japan on that break. it has been on that rake since wednesday. south korea, closed for children's day. the route in the oil price coming during asian trade. sydni, down 0.8%. the hang seng, feeling the brunt of this. brunt. the iron ore a lot of the energy players sellingnder intense pressure. looking at some of the other stocks, the millionaires factory came through with a fifth consecutive year of profits.

billion aussie. this is after the competition commission said in australia, some of the rivals will not have roaming outside the major metropolitan cities. galaxy, down 6%. analysts saying it is going to have to move to cost cuts to push profits higher. we are talking about the meeting between malcolm turnbull and donald trump. if you look at the trade relationships, you can see this reflected here. significants a very trade deficit with the u.s.. it has been decreasing. it shows you the last time we saw that trade relationship in a surplus was back in 2013. manus: thank you.

news coming through. today the last day when shareholders made their agreements. shares have been tendered by the close of business last night. that is moving along in the direction. moving to politics, this is important. decision day of in france. voters head to the polls. against amacron. macron final rally, spoke. leading thisen

fight for the second round. the one that opposes the two projects, the second front. do not boo. make them lose. vote against them. we must defeat them in the ballot boxes, not vote against -- not boo them. manus: when you look at the momentum, today is the last day. there is the assumption they are ready to arrive. does le pen have any chance? or is that a presumptive statement? if you look at the polls, it is almost impossible for marine le pen to become president. it is about a 20-25 difference. about 63-64% in

terms of popularity. of course it is all about voter turnout. this is one thing all the french are talking about. , in thelast six years second round, it is more people that go in vote than in the first round. 70% for the first round. this time, it looks like we may lose turnout. it may drop 5-6 points. good morning. turnout clearly important. ronl me where we go if mac does win. how he goes about building a body and force that can help him lead. francine: this is what people are worried about. if you take a longer-term

picture, the sunday where the candidates were announced, now you have to think of yourself. two main parties. macron founded. how does he govern? vote forre the french who ghost of parliament and gives the majority, to push through reforms. because his party, which is a movement, is not fully fledged, people are wondering whether he has promised, the pro-market kind of reforms he has promised, can be pushed through. if you doesn't have a majority or big presence. this is why it will be crucial by what margin he votes,

if indeed he becomes president like expected. manus: great work. we are looking forward to lots of interesting interviews. why do you get better than i do? where are you? francine: this is the headquarters. deanan imagine, jimmy drinking some whiskey on the terrace at is for after the election. thank you very much. joining us live from paris. bloomberg tv and radio, we will bring you special coverage. francine is there for the weekend coverage. the other big issue, the top economist has opened up the debate as to how long the central bank will hold off on

the reading interest rates. anna: joining us now, the chief european economist at jefferies international. let's starts with the ecb. italy, also. wait untilht not past the asset purchase program. you were a big ecb watcher. you had some clear messages. rates on hold until after qe is finished. how long? mario draghi, at the conference, the message was clear. they were going to raise the te until they finished qe. going to be difficult for them

to hold the line. we have the council which is going to fracture more. september is key in terms of signaling to the markets. in september.arly we know wages have not picked up. we have to make a decision about next year without knowing whether core inflation is going to pick up. eanus: you question th robustness of the data. you talk about this weakness in france and italy. >> italy is more worrying. some saying, italian gdp is going to be robust. the central bank saying, it posted only to. 2. people putting decisions on

hold. italy is more worrying. it hasn't really recovered. it has gdp 0.7% plus. case, still well below. nonperforming loans. anna: you question whether this real data is going to live up to some of the survey data. the french election, we are trying to move on. the italian question hangs over. you are putting data on this and saying, we are busy enough. that is what the rumor mill is suggesting. italy may have to tighten fiscal policy. the budget rules, coming out of brussels. if you are running that the window for them

to do this is september were october. aree, wed of the going to know. that would complicated the decision to the policy decision in december will be before they go to the polls. manus: the risk is, the distance between the italians and the french. this is the euro index. very comfortable break. line, isn't it? they want to see a strong euro. they don't want it to blowout. is the euro move cap relatively speaking until the end of the year? >> i think the ecb would hope so. overnight,own, another sort of confirmation of

her noon concerns about the global recovery. eurozone, it is incredibly open. toneeds external demand provide recovery. part of the story is a need for a weaker europe. the euro has not gone down. we will talk more about commodities in our next conversation. they are living with a current inflation rate that has something to do with that. we are going to bring you live coverage from paris. the first presidential election. exclusive interviews from the former president. coming up on the program, we will be back. falls $45 a barrel.

we will take a look at the drop the next. ♪

oil, $45 a barrel. the first time since opec agreed to cut back in november. the decline driven by extension in the u.s.. the canary in the commodity coal mine. what is the driver? china or supply? all as a new day in commodities. it turned into a bit of a bloodbath. it is oil we are focusing on today and is supplied.

prices edged lower. the $45 a it hit barrel level, losses accelerated. fundamentally speaking, we have production.d u.s. that is confounding any attempts to control the market by curbing production. libya, which is exempt from the ats, said its production was the highest level since 2014. pushingthese factors oil lower. next eating. the our expectations coming down because of the lack of ability of opec to control the price right now? the next big thing is that

may 25 opec meeting. whether toill decide extend production cuts. agreeinisters seem to they need to extend those cuts as do leaders from outside the group that took part in that agreement. there were some expectation even if they extend those cuts, that will be not enough to halt the decline we are seeing in oil prices. it problem is fundamentally is getting cheaper and cheaper for u.s. producers to produce oil. pricesolerance for lower is growing. the level which they are incentivized to bolster production is dropping. let's see what opec can pull out of the bag in terms of encouraging global colleagues to join this.

just as alex was talking, i thought i would hold this up. i don't know how pronounced it is. this is the volume going through overnight. when you see this kind of aggressive move in commodities and oil, what goes through your mind? >> i am sure supply is the main story. there is a questioning again of the reflation. the week this, ongoing weaknesses in the global economy. we have these times of more pessimism coming through. falling,g growth is short of expectations. partly led by the u.s. there is this debate about this verdict on china. i was looking at iron or. iron or also falling. of steel industry

fell below 50. at the same time, much higher exports. something seems to be out of whack. is this about china or global growth? >> we know it is slowing, but by how much? with the u.s., you can actually see the data. it is not living up to expectations. we are confident the u.s. will outperform over time. we know the fed is going to raise rates. issues ont all these the strength of the european economy. i think it is more of a pessimistic situation then people were. moving andl prices reinforcing. is interesting how

nuances turn into a congratulation of thought. we don't know whether we are looking at it dropping by 7%. we tried to put it in context. ore, stockpiles of copper, is the enemy. my question is, is the reflation trade a new ones question or fundamental rethink? lived uptrade has not to expectations. that has been consistently below what is stressed. the world was looking better. it has picked up very slightly. did we get ahead of ourselves? >> i think we did. the eurozone, surveys. the thing about surveys, at a global level, the new normal is lower.

anna: interesting conversation. thank you. up next, we are talking about u.k. politics. we will have the details. this is bloomberg. ♪

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you wouldn't pick a slow race car. then why settle for slow internet? comcast business. built for speed. built for business. manus: it is "bloomberg daybreak: europe." it is 1:30 at lunchtime in hong kong. the hang seng index down. the chinese stocks under pressure this week. nejra cehic is going to explore what is driving these markets. daya: we are seeing a third of declines for asian stocks. i am focusing on chinese equities. the shanghai composite set for a 1.5% drop this week. that would be the fourth straight week of declines, which would be the longest run of weekly losses this year. it is about concern over beijing

efforts to reduce leverage in the financial system, but also slumping monody prices spilling over -- an prices spilling over into equities. this is wti. that below $45 a barrel. for the first time since opec agreed to cut out -- outputs. than onelumped more dollar as a volume surged. we have seen wti prices collapse around 10.5% this week. it has been a bad week for oil and industrial metals, but barclays is saying the panic may be fleeting for investors who hang tight. ahead to theg french presidential election this weekend. the euro taking the spotlight. this is the bloomberg bureau spot index. yesterday's accession rose the most in five months. -- yesterday's session rose the most in five months.

we are seeing money move into the yen. you can see the euro index has gone above its 200 day moving average. looking at another 200 day moving average, i am looking at that 10-year u.s. break even rate here. this is the lowest since donald trump won the u.s. election. we are not seeing treasuries trade in japan. we are seeing a weaker dollar against the yen. rateuch of this breakeven is about a loss in conviction in really -- in relation? how much is it commodity prices falling? anna: a new edition of daybreak is available. let's take a look at some of the stories. the cover story, commodities. the oil plunge.

trading below $47 a barrel amid concern opec cuts want to be enough to combat surging u.s. production. 44.31.ow at trading down in the 44 range. raising all of the gains we made since the opec cut in november. manus: let's see what comes out of the next opec meeting coming up in a couple of weeks. we will be covering that. the next story is the big one. the french presidential election. the last day of campaigning before sunday's runoff. a strong pull lead over marine le pen. marine le pen has said scoring 40% of the runoff would be "an enormous victory." anna: warren buffett told cnbc has sold a third of his stake in

ibm. he was the company's biggest investor with 8.65% stake last year. he holds his annual investor meeting on saturday in his hometown of omaha. to clear that up, i messed up the oil price. dipped below. when it goes red, it just blends into a big see in front of you. let's talk about the u.k. councilthe local elections. they went temples yesterday, and theresa may's conservatives are on track for a sweeping victory. the voting appears to confirm and labor leader jeremy corbyn failed to inspire voters. anna: let's talk about this. wherewith bloomberg reporter

eddie -- we are with bloomberg reporter eddie. let's discuss what happened overnight. labor falling back. >> certainly. allu.k. seems to have lost feet it previously held that have been declared so far. labor doing quite badly around the country. no scottish result in yet though. -- -- have gained five county councils. they want -- they won the inaugural mayors. the conservatives will be pleased with how it has gone so far. job, eddie.fficult a currentrapolate to -- coronation of the conservatives and a general election, or is there a lot to play for in the next four weeks? the story changes in terms of europe every day.

extrapolatewant to too far from the election results. they are very good for the conservatives. the turnout is low in local elections. some are voting on local issues instead of national issues. there is no polling in london this week. there is still five weeks to go. elections tend to confirm what the opinion polls are going to say, but the conservatives are in a strong position and the opposition labor party is in a weaker position. anna: thank you very much, eddie. an update on the u.k. political story. david owen is still with us. we wouldn't normally focus much attention on local elections. because of the proximity to the national vote, they take on more

reverence. david: --moral relevance. david: they do. they are making sure people do vote in june. it is going to be a tory landslide. theresa may will have more negotiating room when it comes to the brexit discussions. we may see that playing out. manus: i'm curious to know what people in the market actually think. does it embolden her negotiating position, or is it rhetoric from europe saying it doesn't matter? 's made a genius attack on europe, giving her a boost. she picked a genius moment to accuse the eu of meddling in the election. people who voted to

remain worried about these negotiations. sure we have the best we can. in terms of negotiations, they are going to be long and torturous. the other thing about holding an election this year is it mean she doesn't have to go to the polls to see if she wins. the transitional range, as everyone knows, has to be there. they are more likely to be in play them a more than her worrying about the future election. anna: what is the market story around this? some people said the pound goes higher, because she can play a stronger hand. because it went higher, it may suggest there would be a softer brexit. david: it is going to be a hardish brexit.

her having a clear majority, what that removes is a risk to some degree of there being a cliff where there is no deal. there is a heads of state meeting and she walks out no deal, saying i am out of here. now she has a big majority. she doesn't have to worry about some of the back benches. she has more room to maneuver. i think that is clear. it doesn't mean to say brexit is going to be soft. manus: it's a new term. we have hard, gray, light. hardish. david: hard on the outside, soft in the middle. like a boiled eggs. egg. that's get more of reality.

new data shows that new business grew it is fast pace. -- grew at a fast pace. how does it stand? let's deal with the data. does that go on the turn is our confidence may be take the ought not? david: gdp data is interesting. that did well in q1. it was areas most exposed to rising inflation like grammar consumer, which did worse. that was the key driver of the recovery. is that going to continue? i would expected to flow. -- slow. we just don't know. the u.k. still has some momentum. brexit is going to be eight long drawnout game.

you were talking about the u.k. consumer. we saw next numbers yesterday. surfaces, l c of h, the clearinghouse, this is something we talked about in the past. the message from london seems to don't try to segment this business. the european commission is consulting on three options, one euroich is enforcing clearing to take place within the eurozone. where does that in-depth? -- and up? -- end up? done on ashould be single platform, the multicurrency.

that reduces risk. it also reduces the cost. if it is going to move, everything should move together. anna: that doesn't seem to time with the -- with what the eurozone wants to achieve. increase would regulatory issues. it should stay in one place. whether that is london, new york, or frankfurt, remains to be seen. it should be in one place. manus: david stays with us. ofid owen, managing director jefferies international. a look at gmm before we go. you can see the commodity currency, aussie dollar, vrable, and canadian dollar under pressure as those commodities, iron ore down. we will get clarification. down 7.7%. natural gas.

you are watching this momentum buildup on commodity currencies. anna: if you are a bloomberg customer, you can watch the show using the tv function. you can follow the charts and functions we put up and influence the conversation by submitting your questions. lap.ng up, a victory the u.s. president celebrates his moment as the house passes a repeal for the health care bill. can it survive in the senate? this is bloomberg. ♪ ♪

anna: this is "bloomberg daybreak: europe."

paris look misty, doesn't it? that is the eiffel tower. a great deal of focus on politics. we have coverage today and the weekend, sunday in particular with the results of the presidential runoff. let's get the bloomberg business flash. apple is selling bonds again after announcing a new round of stock buybacks in a 10 point 5% dividend increase for shareholders. -- eiffel maker made sale sales in as many as six parts. is the tech giant third trip to the bond market this year. monte paschi has said its capital strength slumped due to its third consecutive quarterly loss and stricter accounting rules. fell 6.5% at the end of december, well logy minimum

capital level set by the ecb this year. china is making its boldest attempt to break the stranglehold that airbus and boeing have all the market for deep commercial airliners. nation's first modern march jet is expected to make its maiden flight later this morning u.k. time. following the development of a smaller regional jets. 919 depends on western suppliers. has sold $1 billion in company stock is part of a plan. he uploaded one million shares from tuesday to thursday. comes a month after the

world's third richest man says he spends about that amount annually on his space exploration company. he still owns almost 80 million amazon shares, or about 17% of the company. britain's forthcoming exit from the european union was little concern for a corporate start up. it opened a new office in london. the ceo told bloomberg that u.k. remains a key market regardless of brexit. no brexit, london is still london and the u.k. is still big u.k.. it is a big country and market. we have hundreds of thousands of users across the country. that is your bloomberg business flash. manus: thank you very much. six weeks after abandoning his first attempt, the u.s. house of representatives narrowly passed

a bill to repeal and replace obamacare yesterday. anna: trump was surrounded by republican lawmakers in the white house. >> this is a great plane. i think it will get even better. this is a repeal and a replace. make no mistake about it. it still faces a significant hurdle in the senate were several key republicans have already said they will set aside the house bill and write their own version instead. stocks rebounded at news of the senate rewrite. the earlier slumped after a house vote. to the will shift focus u.s. jobs report that will be out later. is it -- it is expected to show a solid labor market. manus: payrolls will increase by about a hundred 90,000. 90,000. david owen is with us.

we need a good number to help us along. march was a big undershoot. 163,000 over the past six months. this is what trumps want to take ownership of. he wants the job, but not the gdp report. these are what the past presidents achieved. in theortant is today federal reserve's consciousness? david: the jobs data in the u.s. has importance compared to other countries. 220,000 oning for the payroll release, which is above expectations. that would be to expectations of the fed going in june. we will see. forecasting monthly numbers is not an exact science. is theeral perception

fed is going to raise rates twice this year. they are in a different space than they were. anna: that is one of the conclusions from your japanese trip. they believe euro and the japan are quite similar. japan is running a massive account surplus, as is the eurozone. they have to invest and recycle the surplus overseas. -- nese investors at the moment, they still affect the ecb. let's talk about the reflation trade. we have the 10-year break even. they are falling over, 1.83%.

this is the lowest since donald trump won the election. i go back to my original question. fading, reflation trade a fading question? we need a 50% tax cut to reinvigorate this? david: we will. if you strip away housing and food, basically, core inflation the u.s. is really low. it is almost as low in the eurozone. this is an issue all central banks face. is the new normal for core inflation actually a lot lower than it was precrisis? i want to see breakevens followed the oil price closely. the prices come down with it.

the primary issue is core inflation. anna: we heard from the fed about inflation getting more where they needed to be recently. are they backward looking for us the bond market is more forward-looking? is this commodities route something that undermines the fed moving twice? david: for the fed, ecb, the focus is on headline inflation. it is on this core inflation rate. can they get core inflation up? can they get wages up? in japan, wait inflation is zero. in germany, it is below -- wage inflation is growing 2%. in the u.s. and u.k. it is growing 4.5. manus: the issue is productivity. yesterday was a

labor productivity picking up. we get this squeeze in terms of potential full employment. does this get better? does productivity get better? david: if that happens, that is a welcome news for the fed and the bank of england. we can start normalizing interest rates. all central banks want to raise rates and get them back to what they think is the new or more -- new normal. anna: what about the politics? the repeal of obamacare, we read

that story a moment ago. does it add to expectation about what trump can deliver or reinstate expectation? david: i don't know. you ask politics has been in a black box. the assumption is it is going to be difficult for donald trump to push through lots of things. is theectation corporation tax cut, the u.s. will do better going forward in the fed will have to respond. anna: that you very much for your time, david. have a good weekend. , managing director of jefferies international. we're going to drilling to the payrolls. gary cohen will be about to give us answers at 3:30 u.k. time. halfwayming up, we are through -- says the results have been the best for several

years. we will talk about the oil sector and others. context.ut a lot in this is bloomberg. ♪

below crude futures drop $45 for the first time since opec's output cuts. anna: decision time in france, just two days away from the election, macron continues to lead le pen in the polls. manus: verily result in u.k. local elections show the conservative party is on course for a big victory in june's general election. anna: the obamacare repeal and replace bill passes in the u.s. house by a slim margin. hospital stocks rebound and several republican senators say they will write their own version. ♪

manus: welcome. it's "daybreak europe," your flagship morning show. anna: we are going to get to some breaking news in just a moment. first, some pictures coming from china. shanghai's international airport, this is the first inght of the c919, a new era the aviation business potentially, as china tries to muscle in on the business that has been airbus and boeing until now. manus: boeing predicts china is going to need 6800 aircraft, the ticket value $1 trillion, by 2025. you get about 158 to 174 seats. anna: a lot of global western suppliers supplying parts for this plane.

live pictures of the first flight of the c919. that is the breaking news this morning. on the aviation space, we've got international airlines group giving us their profit after tax of $27 million for the first quarter. profit,ted operating $170 million, above the estimate of $163 million. the operating profit of $151 million, that is a non-adjusted basis. also giving us guidance, expected to generate improved operating profit in 2017. earnings surged last year as the brexit vote had less impact than the company anticipated. they saw this trend continue with yields improving, asian tourists coming back to europe following that string of terrorist attacks. slightly more optimistic outlook. said it largest airline had a strong start to 2017. manus: how do you get to the

biggest hotels in the world? you travel by flight, but you get to an intercontinental hotel in you check in. mr. solomons is to retire. you want to nick into your ticker. the stock is on a record high. 41 pounds, 79 pence. rising for 11 days. longest winning streak since 2003. solomons is to go. total return, 20.07%. when you want detail on performance, you dig in. one of the numbers, first quarter revenue per available room. who would have thought you could get it down to that? 2.7%. that is about what morgan stanley had penciled in. buyback, $400 million would be returnedvia

special dividend, and occupancy rates rise a little bit. they expect to reverse. undoubtedly the news is that richard solomons is to go. here's where you go on your screen. if you really want to know who is who and what is what, this is the man who is taking over. he's 46. he's been with the company since 2011. he's on the executive team. there is solomons. interesting moves at ihg, trading at the highest price since 2003. anna: pearson numbers crossing now. one headline catching my eye. we've seen off for reading profit for the full year coming in at $570 million. giving us an update on their guidance, but also saying they

are announcing further initiatives to simplify the company. they are announcing a review of the publishing unit. this company has taken some action on its strategy and structure and seems to be continuing that. manus: let's talk about markets. .o straight to gmm european equity futures on the open. commodities and oil, those are the bulwarks. do you believe the crush on iron ore, the demolition of oil, is temporary or something which is just being checked by the markets? the translation comes through the forex lens. let me just click on the iron ore price. we are down 7%. if you want to drill deeper, there you go. you can see what's happening. singapore,wn in price of steel dropping, and news flow rolling through. ruble down, canadian dollar down, aussie dollar down. anna: is -- does this have

broader significance? is this telling us something about the supply and demand dynamics? is this about the chinese growth story or the global growth story as we were discussing with david allen? we've got a continuation of this theme. the oil price is on the move down. and 37.34 on brent, wiping out all of those post opec cut gains. without the effect on the fx markets too. manus: futures are lower in europe. bulwarkown, more of a than the rest of the markets. s&p is off by 0.2%. asia has had a tough run. on the week.7% shanghai, sydney, all down. anna: some of these yields coming down on the bond markets.

interesting in the context of the commodities story. going to be a busy day. stateside payrolls data due later on. 190,000 is the number we are looking for. manus: let's get to juliette saly. that's a lot for you to digest. juliette has your first word news. juliette: thank you. in the u.s., house republicans have mustered just enough votes to pass their health care bill. the vote sends the american health care act to the senate. that salvages woodhead appeared to revereomed mission and partially replaced obamacare under intense pressure from president donald trump. it stands little chance of being passed in its current form by republicans in the senate spooked by reports the plan would cause millions to lose health insurance. >> it has been a catastrophe and this is a great plan.

i think it will get even better. this is a repeal and a replace obamacare. make no mistake about it. see whatblic will now they gave their name to. they put their name next to you paying more for less. we will make sure the public is aware of that. juliette: donald trump and australian prime minister malcolm turnbull seem to have patched up any differences lingering over a phone call between the two in february. they appeared together aboard the uss intrepid at a ceremony marking the anniversary of the battle of coral sea. trump told reporters he and turnbull get along great and says the media exaggerated what happened on the call. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at too. anna: thank you very much.

we are halfway through europe's earnings season, the best in several years according to jpmorgan. manus: joining us to put all this in context, our bloomberg markets reporter downstairs. justina lee, welcome. when you look at the overall momentum, there's a lovely line here, the revenge of the european southern bell, so to speak. we on an upswing. from what you've seen this week, can that sustain? what stands out for you in terms of putting these things together? >> we've definitely seen some really good numbers this week. all these years, we've been waiting for the earnings recovery in europe. looks like it's coming back here. we see shell learning to live with lower oil prices with cost cuts. we see europeans having a few more points of economic growth. expectations have been pretty high for the big banks. we've seen hsbc beating

estimates on revenue growth. we've seen trading revenues coming back just as we've seen with the u.s. investment banks. anna: strength in the banking sector, the beverage sector, what does this mean for the relationship in a transatlantic sense? how does that compare to what we've seen in the u.s.? >> for many years we've seen u.s. earnings outshining european earnings. this year it seems like that might be flipping. we look at data compiled by jpmorgan as a last week. it looks like etf growth in europe is twice the pace of the u.s. now. if you think about the cheaper valuations you are also getting, that bodes well for this big rotation we've heard about back into european equities. saw 562 million go into french equities alone, the biggest inflow since we started tracking data.

you can dig a little bit deeper. there is no doubt about it, when you look at this, the growth in earnings has been on the oil side. anna and i have spoken to a couple of these ceo's, the oil and gas producers. ofn you look at this moment a shakedown in the oil market, down 11%, it shakes confidence, doesn't it? >> it certainly does, but like i mentioned, we've seen some companies learning to cope with this new environment. at least for now we are seeing some support. we have to see whether that really sustains into the next quarter. anna: justina, thank you very much. justina lee joining us there. busy week in terms of the commodities space. we've had a lot of focus on commodities, iron ore, and the oil price. it has been on the move

throughout the session. , 47.44.rent manus: you've got iron ore, the debate as to whether that is the canary in the coal mine for markets. can you tie up commodities to something much bigger in the global economy? you may have the commodities coming under pressure, oil under pressure, but the s&p is holding up for the moment. brent at the bottom of your screen. anna: when does this commodities environment start to kick in for the equity picture? we will discuss that into next week perhaps. 7:12 in london this friday morning. up next, the french presidential race enters its final stretch. we will go to paris for election in alice's. -- election analysis. this is bloomberg. ♪

manus: it's friday.

we have it on good authority. there it is, the sun is shining in london. the tories take the lead in the local elections. 129 .26. juliette saly is standing by. juliette: thank you. apple is selling bonds again after announcing a new round of stock buybacks and a 10.5% dividend increase for shareholders. the iphone maker may sell debt in as many as six parts. it is the tech giant's third trip to the market this year after in february selling $10 billion in the u.s. and $1 billion in taiwan. -- said its capital strength slumped due to a third straight loss. the common equity tier one ratio fell to 6.5%, well below the minimum capital level set by the ecb. the italian lender is seeking a

rescue and posted a net loss of 169.2 million euros in the three months through march. amazons ceo, jeff bezos, has sold company stock as part of a planned divestiture. he offloaded one million shares from tuesday to thursday, ranging in price from $935 to $955 each. that comes a month after the man said he spends that amount annually on his space exploration company, blue origin. bezos still owns almost 80 million amazon shares. britain's forthcoming exit from the european union poses little concern to corporate chat room startup slack technologies, which just yesterday opened a new office in london. ceo stewart butterfield told bloomberg the u.k. remains a key market regardless of brexit. or no brexit, london is

still london and the u.k. is still the u.k. it is a big market. we have hundreds of thousands of users across the country. probably close to 200,000 in london alone. juliette: and that is your bloomberg business flash. anna: thank you very much. china is making its boldest attempt to break the stranglehold of airbus and boeing on the big commercial airliner market. manus: the c919, remember that name. it is made by the state-owned company and it is just made its maiden flight. it is going head-to-head with boeing and airbus. let's get to our shanghai bureau chief. he joins us from pudong international airport. we saw the flight takeoff. we couldn't have timed it better if we tried. that was the picture we showed you. this is where tv gets you. greg is just going to be back with us very shortly. anna: we saw the flight takeoff.

just failing to establish connection with greg. 7:18 in london. interesting for the overnight news is what is happening in paris. this is where we find bloomberg's francine lacqua. she's standing by with a guest. francine: thank you so much, anna. in two days, the french vote in the second round of the presidential election. it really will decide the future of france. we have two opposing candidates. marine le pen couldn't be more different from emmanuel macron. let's speak to the chief economist. thanks so much for being with us. marine le pen versus emmanuel macron. the latest polls showing advancement for mr. macron. is there any chance that marine le pen becomes president? >> the short answer is no.

francine: because the gap is so wide. >> yes and we have to look at the political arithmetic. just after the first round, emmanuel macron has one million votes more than marine le pen. second point, we know that the transfer of votes from the people who voted for other candidates will be positive for macron. more voters from the left and even the center, the right. she will not gain on that. don't see whye people who did not vote in the first round suddenly would choose to vote for marine le pen. i think the outcome is clear. he will be elected the next french president. theonly uncertainty is

margin of victory. 60% is what most polls project. francine: i guess the concern is, does the margin of victory for macron and give him a better chance to be able to govern? 18 we go 11 and june to the legislative elections. >> i think the gap between the candidates are one of the key elements, looking at the next national assembly. the wider the gap, the easier it will be for macron to say to the french citizens, you voted for me with a wide margin, so let's be consistent. you should give me a majority in the national assembly. francine: what are the chances of that? he doesn't have a party. you don't have any establishment party in the round. how is he going to muster support?

will people swap, so his people can go into parliament? francine: i think we have to look at different political scenarios between the second round and the national assembly. the you will -- the usual scenario is, there's a clear momentum for the winner. we know that the turnout ratio in the national assembly election will decline considered -- significantly. francine: even if this is not a party we've heard about before. he calls it a movement, not a party. >> there is no longer any socialist party. most of the key guys in the socialist party endorsed macron. normally he should have a better momentum than other parties. now there is another scenario, a fragmentedave

political situation in france. we saw that in the first round. basically four political forces with equal weight, far left, center left, center right, far right. degree of the same fragmentation, then maybe nobody, no party, will have a majority in parliament. there's a final one. back to normal politics. people who endorsed macron in the first round and the second round will go back to their initial party. bed made by is the the center-right party. they've lost in the presidential election and they expect parliament to impose what we call in france a cohabitation with the president. francine: which basically means working together even if you're not from the same party. talk to me about how politics

translates into the economy. what does the french economy need? is it competitiveness or productivity? >> let's start with the analysis of the situation and one figure. years, gdpt five was four points lower than in other g7 countries. blame global financial conditions. we can't blame the ecb. monetary policy was very accommodative. we can't blame the euro. francine: what do you blame? >> we have to blame ourselves. we have to blame inefficiencies in the french economy. i think there are many. o. least tw

one, clearly, the labor cost. the little regulation is not helpful for companies. secondly, we have too much government spending. very means that we have a high tax burden. what is clear is that the french economy does not suffer from a lack of demand. what should be reformed is the supply side. macront's why i think had an economic agenda, which is, we have to improve the supply side. francine: he was french economy minister under francois hollande. he wasn't -- he was able to do some reforms, but not all of them. will he be able to do them as president? >> when he was named economy think hein 2014, i presented a bill with a lot of

ambitions. he was only economy minister. i guess the analysis is exactly the same, but this time he would be president. hopefully he will have a majority. this changes the situation significantly. again, let's be clear, he will have opposition from maybe trade unions, maybe political parties, so it is not a done deal. i think that people have understood that without reform, there is no way to address the number one concern for french citizens, which is high unemployment, structural unemployment. francine: thank you so much for joining us, bruno cavalier. i'm going to hand it back to you guys. plenty more coverage throughout the day. manus: francine, great job. look forward to production in

terms of the election. macron is on tape, saying he's chosen his p.m., but he has not named his p.m. thus far. anna: this is bloomberg. "bloomberg daybreak: europe -- ♪

guy: good morning. welcome. this is the european open. your first trade of the day coming very shortly. what are we watching? crude crushed. $45 for thelow first time since opec cuts back in november. is u.s. shale being too aggressive for its own good? calm before the french election. markets incredibly sanguine ahead of sunday's vote. we're live in paris.