macron's moment as the french front runner says he's chosen a potential prime minister. the nationalist may be headed for defeat. shell shock. the beauty i falls below $45 a barrel for the first time since opec agreed to cut output. are u.s. producers being too aggressive? theresa may's conservatives win big in regional elections. that suggests what will happen in the polls on june.

we have plenty more from the u.k. and the conservative party. and, today's nonfarm payroll figure, a rosy picture of the u.s. economy? good morning. welcome to "bloomberg surveillance." i'm francine lacqua in paris. we have full coverage of the french presidential election. mark barton is in london. i'm looking forward to the conversation with andreas dombret. you have our market check, mark. mark: i do. check out what's happening to european stocks. big day ahead. the jobs report in the u.s., the french election on sunday. let's have a look at the ftse. let's have a look at the european benchmark, even better. highest level since august 2015 yesterday. the big move seems to be continuing in the commodities market. the u.s. 10-year is unchanged. money moving into the yen.

it is a risk-averse day today. oil, lowest level since the backend of last year. the movement down and commodities. -- down in commodities continues. let's get the latest bloomberg first word news. here's nejra cehic. nejra: in the u.s., house republicans mustered just enough votes to pass their health care bill. the result sends the american health care act to the senate. it stands little chance of being passed in its current form by republicans there who have been spooked by reports the plan would cause millions to lose health insurance. >> this is a great plan. i actually think it will get even better. replacea repeal and a of obamacare. whate public will now see they gave their name to. they put their name next to your paying more for less.

we will make sure the public is aware of that. wti has slipped below $45 a barrel for the first time since opec agreed to cut output. crude has plunged more than 8% this week amid 11 straight weeks of expansion in u.s. production. in the u.k., early results in local council elections suggest theresa may's conservative party is on course for a sweeping victory. according to the bbc, across the 23 english and welsh counties that had fully declare results, the tories had a net gain of 150 seat in labour had lost 119. lib dems lost 29 seats while ukip failed to win any seats. dayal news 204i was a powered by more than 2600 journalists and analysts in more

than 120 countries. francine? francine: thank you so much. we are here live from paris, two days until the french presidential vote for the second round. this is when the french will choose their next president. it has been telegraphed. marine le pen versus emmanuel macron. the latest polls, yesterday night, late in the evening and macron isgesting 61%, 62% of votes on sunday. given the gap between macron and le pen at the moment, almost impossible for marine le pen to become president, but watch out for voter turnout. in terms of how the candidates are positioning themselves, we know they are giving interviews to local press. let's listen to emmanuel macron trying to once again rally the

troops to make sure people go and vote for him. for the past 10 days or so, we have been leading this fight for the second round that opposes the two projects face-to-face, the one of the national front. no, don't boo them. it's pointless. go fight them. go make them lose. we must defeat them in the ballot boxes. francine: joining us now from paris, one of emmanuel macron's economic advisers, professor philippe martin. great to have you on the program. thank you for coming in. how crucial is it that mr. turnoutets a big voter and also that he gets around 60%, 62% of the vote, to make sure he has a chance of

controlling parliament? philippe: it is important because it generates a dynamic for the legislative elections. the laws have to be drafted in parliament. we need a majority at the parliament. that means the movement has to have a majority. the more we get votes at the presidential election, the better chance to get a majority. francine: what will be his number one reform? he's considered very anglo-saxon almost. reformsnking liberal to unlock the labor market. philippe: the first thing he will do, he said he will do it during the summer, would be the labor market reform. the labor market is still too rigid. we have not done the response that other european countries have done. theeed to do this to unlock labor market, especially for those who are excluded from the

labor market. the second thing to do is also to reduce labor cost. in france, especially for unskilled workers, labor costs are too high. that means there's a problem of a gap between labor cost and skill. francine: he was economy minister. why didn't he do more on those when he was in charge of the economy? philippe: he wanted to go further. he said this loudly. that is the reason he created this movement. he resigned as the minister and launched his presidential campaign. he wants to be much more ambitious than the former government. francois hollande was not elected on such a platform. he was not elected on a platform of reforms, especially on the labor market. so france wants to be reformed. do you believe the labor unions which still holding a lot of power in france are ready for

that reform? philippe: some unions are not clearly, but there are unions who are more reformist and they want reforms. ,n fact, in terms of elections the most reformist one is the one in top position. it is not going to be easy. have anink that he will electoral democratic mandate to reform the country and he wants to do it fast. we know these reforms don't have an impact immediately. it takes time. francine: what about the tax cuts? i live in london. a lot of french living in london. will there be tax cuts to attract new capital, fresh investment, but also people? philippe: he wants to reduce corporate tax on profit from 32% to 25%. that is going to impact investment. he wants to reform and reduce also the wealth tax, which is

big on people, and i guess for people who hesitate to relocate between london and paris. then there's also a local tax that he wants to reduce. francine: is there something that is not in his program that you would do? how do you get productivity back? philippe: i think the labor market reform is important. the education reform is important. training. he puts a lot of emphasis on training. in germany, austria, scandinavian countries, the training system is extremely important. he really believes we're going to change jobs. you need a training system which is very efficient. that is one way to get higher productivity. you need also more productivity. if firms are going to exploit innovation, they need to rearrange completely their way of working.

right now in france it is difficult for firms to rearrange the way they work. we need more flexibility. that is one of the crucial elements of the labor market. ecbcine: you have the starting at the end of the year. we will come back to that. thank you professor. that was philippe martin. mark, i want to hand it back to you. we have plenty more throughout the day on bloomberg tv and radio. we will bring you special coverage of the french presidential election on sunday. mark: david stubbs is here, jpmorgan global asset strategist. valentin marinov. gentlemen, thanks for joining us. let's show off. this is euro since first round, since first round, basically all these currencies have fallen against the euro, yen by 5%, swedish krona, danish krone. this is my second currency chart. overnight volatility.

nothing near brexit, but still fairly elevated levels. valentin, how are we positioned ahead of sunday? valentin: we are bullishly euro. we've seen the lows of the year. the first round, it could be a game changer for the euro. we expect the second round to , thatm what we are hoping emmanuel macron will be the new french president. this much seems to be in the price already. the bund spread is back at the lows. it feels like we are positive for the euro. a lot of that positiveness may be in the price. the path of the euro will depend on the eurozone fundamentals and indeed the prospects for ecb qe taper. positive over longer-term but for a different reason. francine: another bit of showing

off quickly. this is france, italy, spain, and stoxx 600 since election. top one is italy, followed by france, spain, stoxx 600. the periphery is outperforming france. as valentin says, game changer for euro if macron wins? david: i think so but i want to distinguish between two things. one is the fear coming out of the markets. a lot of that has happened. there's a little more to go. that is very different from investors outside of the euro area buying into the sustainability of the currency and it being a place they want to park investments for five years and 10 years. is it the place with the biggest upside in equities? a lot of the quantitative analysis would say it would. if you look at the upside of potential for economic growth,

margins, still very depressed. etc. i think it is still going to take it while for that belief and that trust to be earned by europe for global investors. mark: david, valentin, stay there. let's get to the bloomberg business flash. nejra: the chief executive of goldman sachs has warned that london will stall because of the risk from the brexit process. lloyd blankfein said that his firm which employs 6500 people in the u.k. has contingency plans to move people depending on the outcome. he added that he hopes the bank would not have to trigger the plans as he wants to keep as much of its activities in the u.k. as possible. britain's forthcoming exit from the european union poses little concern to corporate starter slack technologies, which opened a new office in london. ceo stewart butterfield told

bloomberg the u.k. remains a key market regardless of brexit. >> brexit or no brexit, london is still london and the u.k. is still the u.k. it is a big market and we have hundreds of thousands of users across the country. china is making its boldest attempt yet to break the stranglehold that airbus and boeing have on the market for commercial airliners. after years of delays, the first modern large jet made its maiden flight this morning. the c919 is made by state owned comeback, but behind the made in china tag, the c919 depends on western suppliers. mark? mark: wti climbing back above $45, earlier slipping below it for the first time since opec agreed to cut output in november. crude plunging about 8% this week amid eight straight weeks of expansion in u.s. production.

a tough week for iron ore as well. prices plunging amid concern about rising supplies and tighter financial conditions in china. still with us, david stubbs and valentin marinov. david, this selloff in oil, iron ore, spreading across metals. is this something we've got to the other two? does this have broader risks? what is going on here? philippe: welcome to the -- david: welcome to the world of commodities for the next decade. you had a huge crush. epic buildout, listed oil and capex rose. since 2013, it has collapsed by 14%. you had enough capacity come out of the market, enough investment being counseled to put a floor

under some commodity prices. --t was a bounce from they are never going to get very far. there's a huge amount of shadow supply sitting there. any rise triggers supply. you are seeing it in oil and iron ore. we're going to be in a chubby trading range -- choppy trading range. mark: what does this mean for the commodity currencies? valentin: the biggest underperformers will be like the australian dollar, canadian dollar, even the new zealand dollar. i guess you can cast the net wider to include emerging markets. what is important is that the drop in iron ore, in oil prices, is happening despite the overall improving global conditions. if you look at global pmi's, hard data has been pointing at a more sustained recovery. despite that, those prices are

coming off, which is highlighting the problem, the oversupply out there. to me, the biggest surprise was how productive or how resilient the shale oil producers have proven to be. the fact that we are producing the same total amount of oil out of the u.s. with 1000 less oil rigs -- the rig count in the u.s. peaked at 6600. much lessis, with infrastructure, you can really produce the same amount of oil. that is a big message for the opec producers. they need to cut more and more. that is a war of attrition for them, which is not boding well. francine: -- mark: stay there. the tories heading for big gains in local elections, boosting theresa may's bid for a large majority in next months national poll. we're going to break down the

results. what do they mean for the brexit strategy? this is bloomberg. ♪

results in the u.k. local elections suggest theresa may's conservative party is on course for a sweeping victory, boosting the bid for a larger parliamentary majority to help her navigate brexit. according to the bbc, across the english and welsh counties that had fully declared results, the

tories had a net gain of 150 seats. labour lost 125. ukip failed to win any seats whatsoever. joining us now, svenja o'donnell. david stubbs and valentin marinov are still with us. imagine on prime minister may's face this morning. svenja: absolutely. sweeping victory for the tories. they are going to try to play this down. one of their key strategies in general elections is not to see this as a done deal. they are worried about turnout. they are worried people are going to think, why bother voting? you're going to see a lot of tories saying, we can't really -- mark: they are playing down the polls. svenja: but behind closed doors, they will be cracking open the champagne. mark: did theresa may's speech, the quite astonishing some would say speech earlier this week, do

you think that speech played into it? svenja: the strategy is to galvanize the vote. it is a one-issue election. it is aiming for the brexiteer parklands. they've won with you can't. it seems all these voters have gone to the tories. they've also probably gained quite a few from labour. that is an issue that seems to be galvanizing voters. how that plays out with europe -- mark: answer me that question in the near term. where are we with e.u.-u.k. relations? svenja: pretty poisonous briefings on both sides. i think at the moment what theresa may is focusing on is near-term election gains. this is gloves off tactics. straight out of lindens playbook.

at the moment, it is a very short-term approach. a lot of results coming up in the e.u. in six months, the picture may look different. the question of whether this will sour relations to an extent that it may poison the possibility of a practical deal for britain, i don't know. there's a lot to play for. poisonalentin, does it the chances of a practical negotiation agreement between the two sides, what happened this week? valentin: too early to say, but it is not going to help it. what investors should realize is that the outcome depends on the british, but also on the europeans. chances are europe will want to make an example of the u.k. chances are they want to discourage any member wanting to follow in the footsteps of the u.k. that means these are going to be

tough negotiations. the risk is still very much out there irrespective of how the election outcome shapes out to the. we also think a lot of political risks are already baked in the cake. the pound is where it is because of that concern about hard brexit. it feels like it is already there. we think that the pound, the path of the pound, will depend on how the economy performs and what the boe is going to do about the economy. this is where we are still very much concerned. we have still to see the real impact of the sterling depreciation, the impact of that on domestic demand, the impact of still uncertain outcome of the brexit negotiations. these are not positive. mark: the path of least resistance for sterling, up or down? david: up in the short-term, around the election result. a thumping majority.

the market is going to like that. i agree that we're going to have this kind of rhetoric constantly over the next 12 to 18 months and learn practically nothing of substance. that is going to keep a lid on sterling. think about this. the currency is down here and the economy is fine. where does the currency go if the economy is not fine? [indiscernible] mark: great to see you. svenja o'donnell, how u.k. political correspondent, david stubbs, valentin marinov. will today's nonfarm payrolls paint a rosy picture of the u.s. economy? that is next. this is bloomberg. ♪

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and add phone and tv for only $34.90 more a month. call today. comcast business. built for business. hey you've gotta see this. cno.n. alright, see you down there. mmm, fine. okay, what do we got? okay, watch this. do the thing we talked about. what do we say? it's going to be great. watch. remember what we were just saying? go irish! see that? yes! i'm gonna just go back to doing what i was doing. find your awesome with the xfinity x1 voice remote. mark: breaking news out of the czech republic. hispremier has withdrawn offer to resign. he offered to step down after the escalation of a clash with

his billionaire finance minister. this is six months before they were due to face off in a general election. here's nejra cehic. nejra: in the u.s., house republicans have mustered just enough votes to pass their health care bill. the result sends the american health care act to the senate. it stands little chance of being passed in its current form by republicans there who have been 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 of obamacare. make no mistake about it. the public will now see what they give their name to. they put their name next to your paying more for less. we will make sure the public is aware of that. nejra: donald trump and australian prime minister malcolm turnbull seem to have

patched up any differences lingering over a tense phone call between the two leaders in february. they appeared together aboard uss intrepid at a ceremony marking the anniversary of the battle of coral sea. trump told reporters he and turnbull get along great and the media exaggerated what happened on the call. $45,as climbed above having earlier slipped below for the first time since opec agreed to cut output in november. crude has plunged 8% this week amid 11 straight weeks of expansion in u.s. production. in the u.k., early result in local council elections suggest theresa may's conservative party is on course for a sweeping victory. bbc, as of 9:00 a.m. u.k. time, across 23 english and welsh counties that have declared results, the tories had a net gain of 155 seats and labour had lost 125.

ukip failed to win any seats. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. i'm nejra cehic. this is bloomberg. francine: thanks. we get nonfarm payrolls later. the first jobs report of the second quarter should show the economy moving past early seasonal quirks. economists expect an increase of 190,000 for april after the weakest level in 10 months. david stubbs is here. valentin marinov, head of research at credit agricole. does today's nonfarm payroll change the narrative that june is looking to be the next hike in rates? david: a bad number does put that in question. the markets' pricing is aggressive in my view. if you look at the underlying drivers, potentially there's a case for not going. i think they probably will.

at this point, the most interesting thing coming out is not the headline measures. the actual number is not the huge thing. i want to see more of that slack in things like the measure starting to fall back. i think we need to get closer to it are sent for wage growth -- 8% for wage growth to be sparked. mark: a little aggressive, david's words, when we look at expectations for a rate hike in june, which went up after the fomc meeting this week. do you agree with that? valentin: i would call it not necessarily conditional on what the results will be. they're looking at financial condition in the u.s. if there's anything that could prevent the fed from making in june, it would be unwarranted

tightening in financial conditions, stronger dollar, weaker stocks, or high treasury yields. from that point of view, we think they may well be on course to deliver that tightening. in terms of payrolls, what is important to highlight, we are at full employment. the headline could be 200,000. we are still at full employment. the unemployment rate is consistent with the fed's projection for 2019. it is really about the wage growth. so long as we are getting reasonable average hourly earnings, closer to 3%, potentially exceeding it in coming months, i think the fed will be content. and provided financial conditions stay stable or improve, they could hike in june. david: the data on labor cost and productivity highlighted again the fact that there's very

little if any productivity growth. labor costs are building to a certain extent. i think that is part of the structural picture. i think the fed is looking at this structural long-term picture. unemployment is very low. i think it is going to go below 4% but it is still very low. they don't know where the bottom is. productivity has been dead on arrival for years. that allows a path to greater inflationary pressure. i don't think they're going to be knocked off course. i think it is going to take something worse. of course if oil keeps falling and i yields -- mark: what is the worry level. anything below $40? david: i certainly think below $40, you get markets worrying about financial stability concerns. equities start to fall. equity markets start to worry. the old might start to rise.

just like when you get closer to $60. mark: i'm speaking to andreas dombret in just a second, the bundesbank member speaking to us from japan. interesting comments yesterday about the ecb might not wait until well past the end of its qe program before it warrants faster tightening. withinnarrative turning the ecb? is june a key month or not? valentin: in our view, it is the case that june could prove eventful. it seems to be flying under the radar. people like to focus on the meeting in june. the ecb meeting could prove important. the groupspires that of governing council members in favor of removing a stimulus taper, potentially even hasty removal of stimulus, has grown in the meantime, from that point

of view, what is important from our view is that at the moment, the euro is rallying on the back of subsiding political risk. what is lacking is support from higher rates in the eurozone, which is a function of the markets' outlook for the ecb. rate is stillr pointing at 1.06. if we go into the june meeting and we see clear evidence that qe taper is on the way, we don't have to wait be on september or later in the year, then those rates will start moving up and the euro could take off. euro-dollar could finish the year at 1.12. mark: thank you both for joining us today. david stubbs and valentin marinov, head of g10 fx research at credit agricole. as the ecb's top economist opens the debate, we're going to speak to the bundesbank board member, former ecb official andreas dombret.

this is bloomberg. ♪

let's check in on the markets. nejra: european stocks still lower. still, if you look this year, european energy stocks have underperformed since the start of 2017. the stoxx 600 still lower on the day, heading for a weekly gain, but look what happened with wti. barrel, recouping earlier losses. it dropped below $45 for the first time since november earlier. still down around 7% this week. it has been a brutal week for metals as well.

barclays saying panic may be fleeting for investors. we are hanging tight ahead of the french election this sunday. if you look at euro-dollar spot right, it is still weak. i like to look under the surface at what is happening in the markets in risk reversals. really interesting if you look at positioning. one week, the white line, increasingly bearish. not as bearish as it was ahead of the first round. there, the positioning is not quite so bearish. investors perhaps preparing for some short-term losses in the next week or so, but not so much further out. and the bund spreads has been tightening. this week, it hit its lowest this year. investors responding to the polls showing macron ahead of le pen. i want to show you the breakeven rate. we've had news over the health care bill out of the u.s. this dropped to its lowest since

donald trump won the u.s. election. it is heading towards its moving average. you've got a weaker dollar against the yen today. bloomberg dollar index holding yesterday's losses. how much of this is about lack of conviction? how much is down to the drop in commodities? mark: the ecb's chief economist opening this debate on how long policymakers are willing to hold off. peter signaling the ecb may not wait until well past the end of its asset purchase program if they economy warrants faster tightening. joining me from japan, bundesbank board member andreas dombret. good afternoon there, good morning here. i know banking and financial supervision is more your thing, but if i can start on monetary policy within the euro area, are we approaching a point possibly when a vigorous debate is about to take place on whether the

central bank should adjust its forward guidance? andreas: good morning to london. the ecb is going to make its decision when we give to the meeting and i'm not on the governing council so i can't really say what will be decided in june. mark: peter prate obviously saying the ecb might not wait until well past the end of its asset purchase program if the euro area economy warrants faster tightening. do you since the ecb has some leeway to adjust its rhetoric, its statement, its path of policy in coming months as the backdrop improves? the governing council will make a decision when it gets to its meeting, but clearly

it is my understanding that interest rates will go lower than they are right now. wherere likely to remain they are for quite some time. going lower is something which i think is not really in the cards. but again this is for the governing council to decide. they will do this for a much depending on the data at that point in time. francine: help -- mark: how comfortable are you about the backdrop to the eurozone economy , which mr. draghi himself says is broad and solid? is that how you would categorize it? no, they ecb is looking at a sustainable growth of somewhere between 1.7% and 1.8% for this year, next year, and 2019. we are having a moderate growth,

but we are having it, and we have it in a sustainable manner. my feeling is, and my understanding is, that the political risks are right now somewhat larger than the economic risks that we have a across theh eurozone. mark: you say -- andreas: if you look to that, still stands at 5.9%. but this is only 1% higher than before the crisis. also, unemployment is moving into the right direction. mark: you say the political risks are greater than the economic risks, which leads us to the sunday vote in france, the second round of the presidential election. if emmanuel macron wins that election, surely the political risks dissipate. are you looking ahead to other

potential risks such as the italian election which has to take place by spring 2018? i meant this more as a general comment, that economic risk is not as large as geopolitical risk and political risk. we have seen the dutch elections, the first round of the french elections. we willter this sunday also have parliamentary elections in france. german elections are scheduled for september. we have quite a number of elections coming up which all have to be held and all have to be seen how they end up. we have regional elections in the north of germany. we have another regional election in a very large state the sunday afterwards.

there are some elections to watch. mark: stay there. we're going to come back to you in just a second. we're going to continue our conversation with andreas dombret next. do remind yourself, i'm reminding it too, bloomberg television and radio will bring special coverage of the french presidential election results. that is sunday. this is bloomberg. ♪

mark: jean-claude juncker is speaking in florence, italy. he's at a conference there. this is the ecb president. he says, we will negotiate with the u.k. greatt the center of newspaper and television coverage over the last week. following that dinner that took place in 10 downing street between himself and theresa may, and many others, that's what bush happening in florence. in japan, we are hearing from the boj governor. he says the 2% inflation target could be reached around fiscal

2018. in line with his assessment of the outlook of consumer prices in japan that he gave at the last boj meeting. let's get the bloomberg business flash. nejra: the chief executive of goldman sachs warned that london will stop because of risks from the brexit process. lloyd blankfein said that his firm which employs 6500 people in the u.k. has contingency plans to move people depending on the outcome. he added that he hopes the bank would not have to trigger the plans as he wants to keep as much of its activity in the u.k. as possible. china is making its boldest attempt yet to break the stranglehold airbus and boeing have on the market for commercial airliners. after years of delays, the nation's first modern large jet made its maiden flight this morning. follows its development of a smaller regional jet. however, behind the made in

china tag, the c919 depends on western suppliers. amazon ceo jeff bezos has sold -- he offloaded one million shares from tuesday to thursday ranging in price from $935 to $950 each. that comes after the world's third richest man said he spends that much annually on his space exploration company, blue origin. bezos still owns almost 80 million amazon shares. that is the bloomberg business flash. mark: let's bring back andreas dombret. thank you for joining us. you would have heard this week, jpmorgan plans to move hundreds of london staff to offices in frankfurt, luxembourg, and dublin. what are bankers telling you about their plans to move to

potentially germany and other eurozone nations in the wake of brexit discussions? what have you heard from the leading banks in london? andreas: first of all, what i hear is that london will remain a very important financial center, no doubt about that. many banks will keep a very big hrtion of their european force in london. with regards to potential relocation to the continent, it is my understanding that most bankers are either expecting a hard >> it or very hard >> it -- hard brexit or very hard brexit. they are planning in a hands on move. i need to ask for your

understanding that i will not and cannot reveal individual discussions with individual institutions to you. mark: of course. there are estimates that we could see as many as 200,000 jobs leaving london. the estimates are wide. scenarioe worst case for london when it comes to bankers fleeing, leaving the city for other e.u. destinations, if the u.k. loses passporting rights? i truly don't know. it is not something i as a central banker and focusing on. what we are thinking about is what kind of risks, what kind of financial stability, will come from a hardware very hard brexit. the biggest german financial

stability risk is the risk that german corporations, large german corporations, are no product,le to access investment banking products, which are being offered out of london right now. that would be a financial stability risk for germany. that is why we are interested that there is a legal basis for londonpassporting out of , to be able to offer these products into germany in a competitive manner, at competitive prices. where these bankers then leave for is very much of a secondary matter to us. we are europeans. whether it is paris, amsterdam, dublin, or frankfurt, this is not something where i should advertise my financial center. we should do be very careful

that we don't have a regulatory race to the bottom in the eurozone by one country trying to market its financial center over the other and trying to make promises which are maybe not promises they can keep. from my point of view, i'm not so sure there will be a very big movement out of london, and for sure it is not my job to advertise my financial center, but to uphold financial stability, to uphold transparent and fair supervisory rights. mark: thank you. andreas dombret, deutsche bank board member, thank you for joining us. "bloomberg surveillance" continues. ♪

♪ >> macron's moment.

le pen starts to acknowledge the nationalists may be heading towards defeat. the latest ahead. below $45 a barrel for the first time since opec agreed to cut output next november. just a job. a rosier picture of the u.s. economy. . days before the french presidential election. i am francine lacqua. in new york for now. you will be joining me here. the sun has even come out. we have new polls and we need to mr. macron was

named prime minister if he becomes president on sunday as the polls suggest. tom: not only the dynamics in france, but i don't know where to begin. we're not putting the news in, there so much news this morning. the major news is i will be joining francine in paris to get you through the week. i'm looking forward to a perspective on sunday for special coverage as the polls break. francine: in the meantime, let's get to the bloomberg first word news. taylor: in the u.s. donald trump made his first visit to new york since becoming president. he attended a dinner with the australian prime minister aboard the uss intrepid. before that here undid much of his predecessors health law. >> i think it will get even better. ake no mistake, this is

repeal and replace of obamacare. make no mistake about it. >> congress will now see what they put their name to. they put their name to you paying more for less. we will make sure the public is aware of that. taylor: several key senate republicans said they will set us out the house health care bill and write their own version and said. here itersion instead economists forecasting they gained of jobs, twice the march increase. the unemployment rate is expected to go up to 4.6%. the u.k., early results show local council elections suggest theresa may's conservative party is on its way for a sweeping victory. france, two days before the presidential runoff election between marine le pen and

emmanuel macron. recent wave of thelism or rejoining guiding principle that has guided their country for decades. day,l news, 24 hours a powered by 2600 journalists and analysts in more than 20 countries. tom: the data is fascinating and non-correlated. non-correlated equities, bonds, currencies, commodities. they were red earlier. texas adding 44. of $.18. $44.70. that is brent. not american oil. $48.73, it is absolutely remarkable.

non-correlation, there is the swiss 20 year yield. the green color should the red. by one basis point. the weirdness of the fixed income market versus commodities is remarkable. we want to take you away from the austerity, real drops in commodities, to the bloomberg. this is good math. this is the bloomberg commodity index log. dis-inflation.at smooth.ok how it was like your trigonometry course in high school. rolling back on the disinflationary trend. it gives you a look at the overall commodity coverage. stewart wallace will join us in a bit. francine? looking for coverage

and focusing on france and emmanuel macron entering the last day of campaigning before sunday's french presidential election. over marine le pen. speaking at a rally in the south of the country, macron urged toers to use the ballot box defeat the national front. thee have been leading fight for the second round that opposes the two projects face-to-face, the one of the national front. boo.on't it is pointless. go fight them, make them lose, vote against them. we must defeat them in the ballot boxes, not boo them. francine: the sun even came out on this terrace.

let's talk about the implications of politics and how this will translate into real reforms if president macron does become that on sunday. --re joined by jeremy gets jeremy ghez. has the mood in france changed? jeremy: it has changed a little bit. emmanuel macron did not appear as in 2002.g this mobilizing force whether you were left-wing or right-wing to defeat the national front. it appears this hasn't happened immediately. there is one lesson i true from the first round. done quite well. the 60% to you see over and over

for emmanuel macron seems reliable and credible. i don't think it is a matter if he will win or lose. i think it is likely. the question is by how much. francine: will that translate into how much strength he has in the parliament and feet into how many reforms he can put through? think it does. the night of the election it was crystal clear to me that with no traditional party in the runoff, it was very obsolete to talk about left and right. waters whencharted it comes to french politics. i cannot make guesses about what will happen in parliament. from new yorking city. within your wonderful research, you talked about a recomposition of french politics. is this a continuation of the fifth republic of hollande or

the advent of the new republic? that is the wonderful question, the $1 million question. in thecron and le pen second round, it is a different system. on his side is with the international community he will enjoy a big honeymoon. it will be about the ability to tell the rest of the world there will be a strong presumption of rejuvenation in france. france will be back in the game. it will be about him trying to leverage that international landscape and away his predecessors were never able to. he will face dramatic challenges at home. that honeymoon won't happen at home. dividedn a country and he will have to make moves quickly to convince the public of his goodwill.

tom: describe the frenchness of mr. macron. jeremy: he is a 39-year-old who was ambitious and audacious enough to run for president. considering two years ago no one knew his name. there was a story about when was the first time he was in one of the major daily newspapers in france, it was three or four years ago. a meteor rise that is completely unprecedented. frenchness is the audacity, the ambition, and the audacity to try out, and the audacity since barack obama brought his support to him. there is an interesting parallel. the frenchness is the relationship to women and his they are an unusual couple

compared to what you might expect. what is interesting is the french have learned to live with this. it is an adaptation to the relationship of our president to the many women. it is a topic we don't discuss, now we do, but the french have accepted it. it will be what kind of relationship he will be able to build with the french population. francine: away from the frenchness. i wasn't even sure that was a word until you brought it up. give us a sense of what reforms -- we need to focus on the economy. going back to the platform he is being elected on, it is closeness to europe, effectiveness, and productivity. jeremy: talking to people close to the macron team they have fundamental priorities and that agenda, the labor market and , and trade.

the labor market is about the a mass -- we don't have unemployment problem, contrary to what many say. the unemployment is very structural in the fact that we have a training problem. we need to get these people the tools they need to confront the challenges of globalization. francine: it is difficult to fire people compared to the u.s. jeremy: without a doubt. there was an interesting story a year ago about uber drivers in north paris. they said, if i wasn't an uber drivers, i've would be in prison. we have a fear of the new economic dynamism which strikes me as not so congruent with our sense. francine: associate professor at hec.

coverage of special the french presidential election, the runoff results. ofwill see the frenchness tom keene as he descends on the french capital. this is bloomberg. ♪

taylor: this is "bloomberg surveillance." i am taylor riggs. a warning for this city of london from the boss of goldman sachs. the chief executive officer lloyd blankfein said brexit may cause the growth of london to .acktrack it has explored contingency plans, including expanding in

cities like frankfurt and dublin. jeff bezos sold $1 billion in company stocks in a planned divestiture. bezos still owns 80 million amazon shares, or 17% of the company. that is your bloomberg is this flash. tom: welcome to "bloomberg surveillance" worldwide. overngton and the uproar obamacare and trumpcare. it is jobs day in america. the oil route stabilizes a little bit compared to what we saw yesterday. it was an ugly morning at 2:00 a.m. this morning. what is important to francine is the paris and the french election. she is equal distance between the arc de triomphe and the eiffel tower. here is francine lacqua.

francine: it is not me, it is the markets that want to know what comes on this. the presidential election, it is trying to understand what france sees as itself in europe. the economic plan, how the country can be reformed, and speak to its people to attract more for an investment. that is what the markets want to know about the election. national front leaders are beginning to acknowledge a little bit after the debate on wednesday that marine le pen has -- fewer chances than she did a few weeks ago. is great to speak to you as always. intove us unique insights the national front and marine le pen's thinking. if she more defeatist then she was six days ago? >> absolutely not. you have 2 frances.

of the cities and the france of the countryside. the perception of the debate is following this dichotomy. many say the debate wasn't good for her. plenty of messages say the contrary. i'm not sure this debate will move the line. francine: 63% of people thought mr. macron was better in the debate. on sunday.te for him jean: this election showed the collusion between all of the media express and political propaganda. i have been invited on many tv's and i'm always attacked. the opinion is very sensitive to this. francine: the polls are the polls. i'm sure you are attacked and the macron are attacked just as

much. you're telling me, sir, you don't believe the polls and marine le pen will be president on sunday? 3%, this is a margin of error when you look at how the poll is done. we cannot say there is a measured trend or changement between before and after. you tellingat are me exactly? what are the chances of marine le pen? the: regarding the poll, lines didn't move through the debate. everything will be clarified on sunday. at the end of the day the people decide. francine: how much in terms of on sunday will determine how well the national front will on june 11 and june 18? jean: we have three scenarios.

scenario the best appeared we lose over 30% or 40% , meaning we have a strong basis to build a new political movement and can reorganize the french political scene around one political movement, which is globalize and another based on sovereignty. i don't believe the question will be asked. francine: is the coordinator for marine le pen. see you on sunday. coming up, the conversation with the former ecb president, jean-claude trichet. we will talk to him. crossing overy into politics. this is bloomberg.

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tom: this jobs day friday, bloomberg surveillance from new york with francine lacqua in paris and tom keene from new york. we must pick up the debris for yesterday's triumph for the republicans in the house. that was the scene in the rose garden. mike pence chatting up joyous republicans with the president making statements. editorialize on

the death of obamacare. we go to kevin cirilli. what was the level of celebration at the trump hotel bar last night? kevin: i was not at the trump hotel last night. it is en route to the senate. we have a lot of concern about the fate of this piece of legislation, particularly on the issue of pre-existing conditions. increasing $8 billion over a five year time span, it is not enough for every moderate senator i spoke with yesterday, people like senator scott. the senate unmanned, adapt, and adjust this legislation, or will they completely rewrite it? kevin: they will completely rewrite it. house majorityd

is larger than the senate majority and more conservative. in this senate, they are more moderate with a lot of senators up for reelection in 2018 up for reelection. a lot of parts of obamacare are still popular with moderates all around the country. tom: 20 get the score, and what will we see? we are still anticipating that. i put this question to representative blackburn moments before -- literally as she was on her way into the vote. she didn't think a budget scored matter because they had gotten it wrong in the past. however, this will be a political issue. the fact this has not been scored will be a huge issue. quickly, can i say the death of obamacare, or is it premature?

kevin: a little premature, it has to get through the senate. i do anticipate the senate to have legislation in the next couple of weeks because they all campaigned on this. tom: really appreciate the around-the-clock effort. full disclosure, he did not close down the trump bar last night. francine in paris, commodity markets on the move. day..s. jobs we always do it right on bloomberg surveillance. gross will join us from janus capital when we go beneath the headline data. this is bloomberg. ♪

tom: it is jobs day in america. it is jobs day in france, that is what politics are about.

francine lacqua between the ark to triumph and the eiffel tower. our sunday coverage as well as moving on to monday picking up the pieces of the french presidential election. the news flow is extraordinary. here is taylor riggs. key senateeral republicans say they will set aside the narrowly passed house health care bill and write their own version. it will likely delay further their possible -- the possibility of any repeal bill reaching donald trump's desk. trump met with the australian prime minister and says they had a productive discussion. they talked about national security, trade, and boosting cooperation. in france, two days before the runoff election between marine le pen and emmanuel macron. french voters will choose to

join the recent wave of populism or rejoin the government that guided their country for decades. we will keep you updated on the election on sunday. early results in the u.k. elections suggest theresa may's party is on its way to a sweeping victory. have a net to gain of 155 seats and the labor lost 125. liberal democrats lost 28. news, 24 hours a day, powered by 26 hundred journalists and analysts in more than 120 countries. i am taylor riggs. enterse: emmanuel macron the last day of campaigning before sunday's french presidential election with an opinion poll, 68% to 32% over marine le pen. this is a guest we have been looking forward to all day.

the french presidential advisor to emmanuel macron and one of the only three people traveling with macron to meet angela merkel a couple of months ago. he is really inside the inner circle of the candidate who looks like he will be president on sunday. is it too soon to say congratulations? >> too soon. francine: even with 62%? 's they have to support macron policy on sunday, so it is too soon. but i'm hoping on sunday you can say it again. francine: are you worried someone won't float, or if they white, an empty piece of paper, it is a vote for marine le pen? >> if you don't vote or vote blanc it is a danger for the election. it is not a worry, it is a fight

. you have to be committed until the last moment, midnight on friday. we need voters. look at: when you economic issues, the reforms, european integration, adoption of another currency or sticking with the euro, is it euro and europe integration that people care about? european integration has been a big topic. people are worried about jobs and competition with the rest of the world. there's a real need for protection. has the macron only manifesto that is pro-european, meaning we don't have to change everything. we have to fight for europe. ,nderstanding europe understanding the euro, changing

the european project. the only way for europe to be our shield and opportunity in the globalized world. francine: how should investors streetot of global wall that is watching look at european integration? clement: the priority would be creating more support. we have to be concrete in the first weeks. emmanuel macron says in the first weeks he wants to talk with germany and european institutions, european partners. we have the first steps on issues like workers, international competition with the eu which create worries among the french opinion and among all europeans. to prove europe can be our protection. it is the only way to make more support. , emmanuel macron is clear it is part of the protection. french currency was very

dependent on germany, for instance. defending and go further. francine: is that really achievable? there is a 2017, forecast from the european commission saying france would be 2.9%, below the 3% threshold. the idea is a commitment that emmanuel macron made. if you make your own economic commitments, you cannot -- francine: when you are in charge and need to cut down on austerity and spend, it is more difficult to achieve. promised allande changing of the fiscal rules when it comes to the eu. what do you think? do you think emmanuel macron can

change where francois hollande failed? clement: in 2012 there was an , talking abouts eurozone unity. francois hollande had to deal with the banking union in the first months. now, everyone is understanding fiscal and social competition within the eu is not sustainable. there is an awareness that fiscal currency and fairness, we action in fiscal april against ireland, there is support across europe on the expectation that new european leaders do that. i was just speaking to jean messiha and he was saying there were 2 frances. how do deal with angst from workers that a lot of their jobs thedisappearing or it is

cheaper workforce from eastern european countries that take their place? places: a lot of rural support macron. it is true there is a big divide whohe country, but people are against globalization and against it. emmanuel macron is aware of that, that is why he made protection a priority. we have to push. in the years to come it will be the main topic if we want support at a european level. topic, frenchtant sovereignty. our sovereignty is best defended when france is fighting alone. ifanuel macron is convinced

we want more protection and actual sovereignty, we need the european level. francine: how would emmanuel macron deal with brexit in the negotiations? clement: he has been clear that he wants a principled approach. his main priority is to defend the european project. we have to be clear about single market protection, rule of freedomsdefense of the of movement within the eu. if the u.k. wants access to single markets, it is welcome, but it has to abide by the rules. it is not about punishment, it is responsibility and principal that makes the eu stick together. a strongmacron wants partnership and special relationship with of the u.k. on the european level in a bilateral basis. francine: one of the key advisers to emmanuel macron.

part of the inner circle. let me hand it back eu in europe . we also have jean-claude trichet. tom: they're looking for her to talking to mr. trichet. , angela merkel is speaking on global trade, mincing no words about the need for a further effort towards free trade. coming up, so much going on. commodities on the move, the impact on china. bring you the professor for the london school of economics on the state of america and on commodities. this is bloomberg. ♪

tom: "bloomberg surveillance"

worldwide. francine lacqua in paris as we begin our coverage of the presidential election on sunday. a terrific news flow and an absolutely fascinating commodity market. let's migrate to london with stuart wallace who handles all of our commodity coverage. the zeitgeist i see is janet yellen wanted to tighten. the chinese are using a cover to tighten, and your world is turned upside down in commodities. is chair yellen the new head of opec? >> it is starting to look that way. we have come off 6% on oil. the back end of the curve is more muted, 1% or 2%. there are good fundamental drivers. 47 was a key level. overnight, we had a selloff when we went through $45. it is not at,

complete route. you would expect opec to come back in quickly. they have a couple of weeks before the next meeting. the question is, can they deepen the cut? tom: here are charts to get you going. intermediary,exas american oil. 100 on down is the convergence. this is the definition of range-bound. three moving averages clubs .ogether -- clumped together how will the oil complex make a bid on oil? stuart: bill have to come out with a strong rhetoric, something they are generally good at. we had an example of that yesterday, though it did not have the intended effect. they have consensus from a three to six month consensus along the

lines of what they agreed to in november. the question is how many more barrels can they squeeze out? the compliance has been good, so they can't do more on that side. the pressure is on them. if they want it above $50 a barrel, they will have to search harder. tom: this is the bloomberg commodity index. this is good mathematics. i am really proud of this. here is the china collapse in 2008. here is a solid linear deflation . disinflation, in oil prices we are on trend with the level of hysteria. is there a discussion of the collapse in the commodity super cycle, or are we just on a lazy trend due to deflation? stuart: the super cycle, i think that ended some time ago. the question will be,

particularly looking ahead five or 10 years, have they invested enough in the last two years to stop and another super cycle? i'm not so sure. the trend down, good fundamental reasons why that is happening in copper, iron ore. we are not in a long-term route, but we have to keep an eye on china and opec. forget about taper tantrum, how about china tantrum. how does the government of a tightly controlled economy, how does china adopt and adjust to the reality of chair yellen's tightening? stuart: what have we seen so far from china? they are trying to pivot. that has been somewhat successful. the expectation is they may try to prop up rings like the

property sector in the first half of the year. that creates a little bit of a demand. demand is something people haven't been looking at. really drawn attention to we have been obsessed about demand? looking at the energy complex, not looking that great. strong but nowhere near as strong as expected. team'sank you for your measured coverage. stuart wallace running all commodities for bloomberg from our london desk. next, my interview of the day with francine in paris. the former the -- head of the european central bank and a clear voice on capitalism. jean-claude trichet. this is bloomberg. ♪

francine: pictures from hamburg. the german chancellor angela theel is live talking about possible franco-german alliance. saying the remaining eu 27 must

not be divided over brexit. we have a united front when it comes to the commission and parliament on how to tackle brexit negotiations. 2 days before the french election, the chancellor is and saying weron need to go back to the franco-german axis if you become president on sunday. gaver: warren buffett berkshire hathaway investors something to talk about at the annual meeting. he sold one third of the investment in ibm. withve been speaking andreas dombret. >> it is my understanding that most bankers either expect a hard brexit or very hard re

brexit. especially banks with complex models on the continent are planning after 10 months of preparation on making moves. taylor: that is your bloomberg business flash. we just spoke to stuart wallace about oil and chair yellen. francine in paris, i will be joining her in 24 hours as we go to sunday's election onto monday. here's the jobs report. here.ful to have you let's pretend it is a normal friday. the absolute message i get from everyone watching and listening is it drives them nuts when people like you tell us america employed.

america doesn't feel that way. why are economists saying this is a fully employed america? >> the participation rate, especially for males of prime working age, is extraordinarily low. that has more to do probably with unemployability. america's unemployment problems are structural. mobility,nsufficient training, and education. tom: if we conflate our structural and cyclical employment -- come over to chart . this is the reality of the miracle of decline in the unemployment rate. it is extraordinary. 2001.in the vicinity of vice chairman fisher and chair yellen, is that the chart they look at?

i hope they look at it, i am pretty sure they do. measures at broader that include the marginally attached and detached. they look at flow measures. earnings pressures. they look at the participation rate, which is still at a worryingly low level. forcine: what would it take today's jobs number to be -- there is a huge surprise to derail the fed from the june rate hike? willem: it is hard to think of a number that would cause a major surprise. i don't think there's anything

other than 50 -- they are beset akey're looking for a we first-quarter. a single data point is mostly noise. don't pay to much attention to it at all. the markets, of course, will. francine: the markets will, but if they are not looking at that, what should they be looking at? willem: sorry? francine: if you say the markets , but they at that will. what do you think they should be looking at? willem: never look at a month's worth of payroll data. the infinite noise to signal ratio. a range of indicators. don't be driven by the latest minor blip. of the hopes and

prayers of a june tightening is wage growth. -- does yourteam team look for in terms of wage growth in the united states? willem: we expect it will stay in the high 2's. if there is any decline from that, that would be somewhat worrying. tom: do you assume a june rate hike is a given? willem: yes. tom: is that why we are seeing the turmoil in china and commodities? willem: it is the most anticipated event. you have to think about it that recognition that china appears to be slowing down. they are the most commodity intensive producing country in the world. is a supplye factor. i would not pay massive attention.

commodities as a whole should continue from a leisured global growth. tom: that is a good way to wake up to commodities. us.em buiter will stay with this is the news flow. extraordinary. kevin cirilli will join us. francine in paris. we will have jean-claude trichet , the former head of the european central bank. really looking forward to speaking to jean-claude trichet about his france. , would you need to know, oil with a bid. worldwide, this is bloomberg. ♪

♪ this morning, finally a slippery bid.

the oil ampligen is halted. the commodity plunge signals tightening from china and chair yellen. thanks, james buchanan. one of the many moderate republicans in the senate. will they cave in and cause the death of obama care? francine is in paris. good morning, everyone. this is "bloomberg surveillance." world headquarters in new york, i am tom. in paris, francine lacqua. what have we learned them the representatives of emmanuel macron and marine le pen in the last hour? francine: we have learned as we know and citizens of france have been seeing for the last two weeks, i would say six months, is they have opposing views of what they think france will

become. they went face-to-face -- they will go face-to-face on sunday. we are overlooking the eiffel tower. the mood is palpable. people are in anticipation. it will depend on voter turnout. friday.is it is jobs day. here is taylor riggs. donald trump made his first visit to new york since becoming president. he attended a dinner with the australian prime minister. earlier he is celebrated with the house on undoing much of his predecessors health law. been ant trump: it has

catastrophe. this is a great plan. i think it will get even better. this is a repeal and replace of obamacare. make no mistake about it. taylor: several key house -- senates republicans say they will set aside the bill and write their own. 100 90,000 jobs are estimated to be gained, twice the march increase. the jobs report will be released in less than two and a half hours. jean-claude junker further rests his reputation in the u.k. questioning the relevance of the english language. he said, "i am hesitating between english and french. made my decision, i will express myself in french, because slowly but surely english is losing its importance."

suggesting theresa may's conservative party was on course for its sweeping victory. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. i am taylor riggs, this is bloomberg. sit too much news flow to on a data check, but it is important. you need to know it is not correlated. that is wall street talk for everything linked together. oil with a foot or $3.76 $43.76y spike -- intraday spike. i would categorize west texas intermediary as still fragile. $50. well under one ought thing on correlation, the swiss 20 year yield, 0.29,

the green should be red. a lower yield on swiss. the european paper is making this really a commodity story all in all. for that, we need to go to paris. francine: marine le pen gave a feisty speech here in her final presidential campaign. it was an appeal to what she called desperate farmers, the jobless. >> i am very proud, my dear friends, to have gotten the people to sit at the table of the powerful. too bad if their delicate is .urt to hear your anger i'm proud of it and take responsibility for it. ofhing can come in the way free people who tell insiders with a need to know. francine: polls predict macron will win 60% to 32% over marine

le pen. we are joined by one of the main pollsters in france. congratulations. you were right in the first round. our pollsters the big winners after being doubted in trump and brexit, it was spot on. >> it was good news 10 days ago. we are very careful, because we know that things can change from one election to another election. it was a good job. francine: talk to us about what we know. 63% macron, the rest goes to le pen with a margin of error of what? points or three points. there is no doubt of the election on sunday. 38%on is at 62% compared to

for marine le pen. has gained points over the last few days, especially after the debate when marine le pen was very aggressive and emmanuel calm andew how to keep presidential. that was important for him. it explains why he is now at 62%, three points higher than our previous poll last weekend. francine: what about voter turnout? is seems a lot of people will not turn up to vote or vote white. >> the turnout is the main issue about the vote on sunday, because a lot of people who they for the first round, have difficulties to choose between emmanuel macron and marine le pen. probably, a lot of them want to

go to vote, or will vote white. we have almost 68% of voters that are going to vote on sunday. turnout will 75% may be between 76%, a little bit lower than the first round. it was 77%. but we have to look closely at is the percentage of people -- what we have to look closely at his people that about white because they are unable to choose between the candidates. francine: what is the likelihood if hea president macron is confirmed on sunday, if he gets a majority parliament in june.

>> the main issue for emmanuel macron is election. people thatls are will vote for him, they will first of all vote against marine le pen. they will not vote for his program. this is an issue for emmanuel macron if he wants to be able to -- he wants toe be able to govern. he would need a majority in the french national assembly. he would not be able to have this majority. francine: thank you. one of the main pollsters here in france. tom? citigroup. buiter of this is an interesting chart. per capita gdp growth of france, nominal gdp

in the era, and here in the sarkozy era. how do citigroup perceive france domestic policy on monday? willem: they will have a new president, most likely macron, on monday, but not parliamentary elections until june. or at leastjority, support from a coalition that follows his agenda, he cannot do much. he won't do any damage either as far as exacerbating fears. it will be a calming effect on markets. for reforms, he will have to wait until after the june elections. lock dedlock, or the grid, is that which we will see in france? good old american gridlock?

upside there is a lot of . france has an administration, a bureaucracy, that can actually implement change if it is voted by parliament. just the wrong policies have been implemented for the last 20 years or more. there is hope, but i am not expecting immediate miracles. tom: if i look at the collapse of the left, we are seen it in the netherlands and throughout europe, how does he speak to the left, which is the large part of the republic of france? willem: the traditional left has been wiped out. leftn, and all that, the is defined quite well. he has to appeal across party lines and say if you want you betterogressive, vote for me. tom: i could hear francine

my french.t nine our special coverage on television and radio. the results as france decides. this is bloomberg. ♪

francine: welcome back. this is "bloomberg surveillance" with tom and francine from new york and paris, though tom will be on the surveillance gulfstream to join me in paris in the next 24 hours. good morning to our viewers across the world and our

listeners in london. ce.are on top of the terra we're not talking jamison whiskey, we are talking the presidential election. i'm looking forward to talking to jean-claude trichet about when politics meet monetary policy. to: right now, we go speaking with kevin cirilli. what a historic moment. to the republicans overplay their hand? did they overplay it yesterday? kevin: i spoke with a senior political strategist in trump's "kevin, that was supposed to be easy. that was anything but easy. "

now it goes to the senate. it is a tough road ahead. what i would like to know, kevin, is our conservatives in the senate, are there is equivalent sees to the conservative of the house in the senate? kevin: yes. you have senator rand paul who spoken out against this legislation. and you have senator ted cruz. are more moderates. the moderates will be stronger in their opposition he comes are up for reelection in states where obamacare, or parts of it, remain popular. tom: thank you for your coverage in washington. lining up the democrats for 2020. let's up the senate for 2017.

who will you watch in the senate debate? is awould say rob portman key player. he is opposed to cutbacks and medicaid. i have to disagree with what kevin said. the key is that they move the ball forward. chances in the senate aren't great, but a team just needs to get to the playoffs and anything can happen. this now moves to the playoffs. critical is the scoring of the washington budget office? greg: the cbo will say this bill will cost billions. it will throw a lot of people out of coverage. that doesn't help it. tom: one more question, if i may. you mentioned the senator from ohio. he has been front and center on caring about the opioid epidemic. who care aboutns

the social fabric of the nation, or is it just about tax cuts? greg: on taxes, if you want to see a tax bill succeed, chances improved. in one week we see a budget deal with no government shutdown. we see the house passing this bill. a tax bill, it is too premature to say a tax bill is dead. tom: willem buiter with citigroup. i was at an investment firm yesterday. it was shifting from a monetary analysis over to a fiscal structure and analysis in america. do you agree this will be a fiscal moment for washington and the politics of the nation ?ersus yellen, yellen, yellen willem: there will be action on

the fiscal side, but market policy will remain part of the furniture. you will see a gradual increase in rates. yes, we are likely to see the tax deal of some kind involving both reform and fiscal stimulus. yes, fiscal policy will be part of the dialogue for the first time in a lot of years. when weeard you nodding were talking about cbo scoring. i'm with you. i think it will be a big deal. up, astute labor and market coverage. and a conversation with william gross of janus capital on fixed income and the fed. ♪

tom: sunday in paris special coverage. francine lacqua is halfway between the arc de triomphe and the eiffel tower. an election with mr. macron very much ahead. the question is the state of governance in france in the linkage with germany. angela merkel speaking on the need for a close cooperation between germany and france. there is no one better to speak

to on the transatlantic dynamics in europe than jason kierkegaard. his service to the danish defense force and his work at johns hopkins university. jacob, thrilled to have you on .ith willem buiter of citigroup please explain where we will be on monday with the new france. will this be a sixth republic, or more of the same? : probably the fifth and a half republic. you have seen the sidelining of the two traditional mainstream parties. if you look at the latest polls for the parliamentary elections in june, it looks increasingly light. 's new party might to get close to a parliamentary majority, which means he will be effectively able to govern.

he will therefore have a good opportunity to put his plans into action. tom: i will make the bold idea. ,hat kind of capitalist conservative, is mr. macron? i think he would dispute you called him a conservative live in he focuses on the centrist mantra. market-friendly person. i look at his overall program that focuses on pension and labor market reform. thatof the holy cows french presidents for decades have been avoiding. tom: will we see economic growth? maybe is a new kind of eurosclerosis. had you start growth in france, denmark, and germany? realistichave to be

here it euro-area growth is 1.7% -- 1.8%, above the above potential. we don't need a jumpstart, we need to maintain this level of growth for the for seeable future and drive down unemployment and raise employment rates. i believe the platform that mr. macron has is the right medicine to sustain the current levels of growth in europe. too short a visit this morning. dr. kierkegaard is with the peterson institute. there is an idea of the morning after in governing. describe the relationship of germany with france in 2017. willem: the relationship has teen weakened during the curren french presidency of hollande. there's a good chance that if

macron is elected, and whoever is the german counterpart, that they will be able to do things. also because the u.k. was able to slow them down. eu of the benefits for the 27 is that it might be able to focus on reforms in the eurozone. there is some hope. questions peer group will do that with jean-claude trichet in the next hour. this is what "bloomberg surveillance" is about. andem buiter of citigroup conversation with jean-claude trichet, the former head of the ecb. this is bloomberg. ♪

francine: this is surveillance

on television worldwide. we are here in paris and tom keene is in you are, making his

way to paris. they sent me first so i can warn thomas coming. is coming. american, just the american. we are laying down the groundwork for you. it's a huge day for france and for europe. i would say for the markets overall, to try to understand if this is the first if macron becomes president. let's get straight to the first word news. taylor: several key senate republicans say they will set aside the narrowly passed health care bill and write their own version instead. this will delay even for the prospect of any repeal bill reaching the president's desk or victory,ours after his the president flew to new york and met with the australian prime minister.

he said they had a productive discussion during their first meeting. they talked about national security and trade. u.k. localts in the council elections suggest theresa may's conservative party is on course for a sweeping victory. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries, this is bloomberg. i am taylor riggs. francine: thank you so much. macron enters the last a of campaigning. is facing off with the lead of 62% to 38%. this is according to a poll. a separate poll suggests that 76% plans to vote sunday. voter turn a -- turnout is key. theking at a rally, encourage people to use the

ballot docs. days, we havet 10 been leading this fight for the second round, that opposes the two projects face-to-face. don't boo them. it's pointless. it go fight them. go make them lose. vote against him. we must defeat them at the ballot docs. francine: joining us now is a man who doesn't need much of an introduction. york is the in new chief economist. welcome to the program. thank you so much for coming on. let's assume the polls are right and assume that we get something like 68% for macron. what happens next? give france does he in europe? we have- jean-claude:

to wait for the election. it is not a done deal. the goals are very positive. will have a very powerful mandate to reform the country. it was his own view since he started to engage in politics. he is not known by the french only two years ago. he may be the next future president and perhaps we will have a majority of according to certain surveys and polls on the parliament reelection. this,clear that if he has he will have a majority in the parliament. all kinds of reform that are overdue and france could start. francine: let's talk about deficits and budgets in why

don't the french recognize themselves anymore in the old classic parties? have they become too centrist? again, the damage that a large deal of public spending on top of the average of the g7 countries on top of that is something that is not considered by a lot of political parties is absolutely negative for france and for job creation. betweente which we had macron and marine le pen, macron was attached to sound policy and to everything that would be spent and was with the intention of respecting the rules. i trust that it is something that is very important.

tom: good morning from new york. as we look at this culture france, can we get a france that is a little more fiscally responsible? you had to worry about a france that would spend too much money, the government was too big for all of france and can they get more responsible with macron? jean-claude: i think so. it's a pleasure to talk to you, tom. i think so. gave wasge that macron that we have to respect the rules. he is also calling for reform and i think he is right here in -- right. i am in full agreement with that. he is calling for new reforms as regards the budget. havecting the rule, we

franced it's important applies its own interest. it is not a question of pleasing partners. it's making sure we do what we can to create jobs and grow. i think we can be reasonably confident there has been a change in the overall position of a look opinion and france. nothing is done yet. betterat can they do a trade policy for france, not only trade with the rest of the continent, but the rest of the world and even trade with the united kingdom? what can be a new trade policy for france? jean-claude: as you know, the trade policy is influenced by each particular government. it is done at the level of the single market.

whole,opean union as a from that standpoint i expect france to be open of course as you said very clearly, to engage global trade. the being said, with influence for the deal to be fair and it is clearly what is being said. frankly inopenly and the debate and the various declarations. francine: the reforms are strong. what has changed since france while along promised the same thing? is europe ready to say let's start from scratch? jean-claude: we will see exactly what is the policy of the new president and the new government. a lot of things have to be done.

a very clear is there is powerful will on the side of the new possible french government and president and on the side of the german partners and the other partners in europe to discuss thenot to present but also to have a view of the future and of the reform that's at six stake. -- at stake. from that standpoint, i think we are in circumstances that are the best in a long time. you will remember at the beginning of the mandate, there relationshiplose between germany and france and the other partners. tom: let me bring in our partner from the netherlands. he is at the london school of economics. professor, a question.

spends well over 50% of gdp in the public sector. pensionsthe talk about and reform, that number has to get closer to 45% for france to be, a dynamic economy. will there be a coalition that will not be frustrated by the losers of such drastic reductions in the public sector? willere any hope france not look like scandinavia in terms of scandinavia? again, i think you are right. this is one other dimension of reform that is important, diminish public spending as a portion of gdp, which are much higher than average. we have these structural reforms in the labor market and we also have cost competitiveness of the

country. on the first point, i think this idea that it is a progressive march in the direction of diminishing public spending, as , a number of countries proved it was possible. it cannot be done overnight. orientationsn such are the unemployed. it is clear that the weight of public spending is much too high and hampers the competitiveness of the economy. the winners will be the unemployed young people and all the unemployed in france. francine: thank you so much for now. both are staying with us and we will talk about global competitiveness and dollar dynamics and the commodities trade. we have plenty more,. we're live from paris and new

york. this is bloomberg. ♪

tom: he will be with us on sunday, are coverage of the french election and market movement and the movement forward. we have been given the gift of the oil market. what do you see this morning? jonathan: i see a big divergence. i am trying to make sense of it. yields are granting higher and i find that dynamic interesting. looking ahead to sunday, we will do that with some coverage of

what happening in your. the front and center as was happening in the job market. thank you so much. oil prices are falling to a five-month low. there is tightening from china and janet yellen. we are back with the former ecb president are in -- present. and thank you so much for being with us. we talked about the french election. talk to me about the upward trend for growth worldwide. jean-claude: i think it the global level as it was said in the last meeting of the foreign bank, things seem to go in the right reaction. it is global. as regards the united states, we will see what happens. arelast indicator is we

disappointing. it doesn't seem to signal something with low growth. the fed was really optimistic on the median term for the u.s. goals. in europe, we are in a situation that is more favorable than before. there is time is him which is clear -- dynamism which is clear. the first quarter is confirming that. i expect that we will continue on that basis. we are two years late on the united states business cycle because of our own major difficulty with the sovereign risk. confident that we will grow. we have a lot of unemployment. tom: what is the biggest risk to all of this? francine: what about china? do you see fundamental structural risks we are

underestimating? jean-claude: it is very important that europe confirms that it is attached to its own construction and the french election i hope will clearly demonstrate to the rest of the world there is no real risk there. that is very important. there are a number of risks in the world. you mentioned china. i have confidence in the skills and capacities of the chinese authorities and the central bank. are risksr they embedded in china. the leverage in the corporate business in china is very high. so, we have to be vigilant. it is true of china and all the world. my own understanding is the global leverage after the crisis continued more or less in the same pace as before. that is something we have to

look at very attentively. tom: very good. withe going to continue him. you global wall street with us sunday. we are thinking about the actions in paris on sunday. you can do that with tv . you can pull in the charts as well and take those charts right off to europe. york, it's from new jobs day in america. it's bloomberg. ♪

tom: foreign-exchange report, down at the bottom. that tells you a lack of correlation as oil craters. the dollar is weaker with the oil implosion. that is not occurring. oil by itself with commodities with leveraging issues in china. we say good morning to all of you. this is "bloomberg surveillance." francine is in paris.

we want to get to single best chart. this is what the professor was talking about. this is ripped up the script, single best chart. this is labor force participation showing a structural malaise of men in america. this is the fully employed eisenhower, men at 25 to 54. this is after the recession. professor, it is linear and ugly. we are miles from the fully employed america of 20 years ago. can policy fix this? >> there will have to be education policy, policies to increase public health. a lot of these men are stuck in the opioid trap. it is a problem that cannot be addressed by traditional measures. tom: do we need to seize back our goods producing abilities.

secretary clinton talked about fair trade. president trump speaks of isolationism. is that anyway to bring back goods producing jobs. >> that's hogwash. those are gone. they are being performed by robots. you can bring profits back, but you can't bring back traditional manufacturing jobs. they are gone for other. -- forever. it will continue to shrink. other jobs,reate mainly in the service sector that are skill intensive and pay well. a banker running for president in france. is it a gilded age? is this a time for a plutocrat? >> i think we are very bad at distributing the fruits of

growth, of technological , ofress, of computerization automation fairly. that is our main failure. globalization is a small wrinkle with the damage done to income distribution. if we don't address that, population will come back in different forms for decades to come. hearing: you were just what he was saying. how do you address it? there is a difficulty between theory and applying it in real economy. if we had theven confirmation by france that populism and protectionism will not win in france and europe, i think we have to take into account the uneasiness of a large part of the population. that comes from the rise of

china in mexico and the like, that is creating change in our own economy. we have technology as he was toing, it is clear we have train and retrain and show that we care for our own people that are under the heat of these dramatic changes. we have value problems that we are mentioning. calling verys acutely for our leaders of our authorities to take care of that. of course, not making the big mistake of closing the trade. that is not the solution. francine: how do you take care of it? it is difficult. i was watching a lot of the domestic political debates. it seems you can close off the

border and you're not a part of globalization and you are safe. how do you make workers that feel left out back on track and then keep the border open? jean-claude: there are structural reforms. with the same kind of overall relationship with the rest of the world, the netherlands are very close to full employment and we are not. a lot of hard work in our own country, but on top of that, even if you have full employment and you have the anguish of the lost part of the population, things are changing very rapidly and that is very important and we have to care about that. tom: we come up on the 10th anniversary of your budapest speech were you spoke about the productivity. can we get better borders in europe? can we do better productivity in your?

-- europe? jean-claude: it is very important or us europeans as well as for all advanced levelies to get back to a of productivity growth which would be permitting it to have growth much higher than the present level of potential growth. that is not sufficient. structural reforms are essential, but also all that permits us. , thank you so much this morning. sunday in paris, this is bloomberg. ♪

jonathan: it is payroll friday,

a bounceback and jobs after disappointing consumer spending. opec is under pressure as crude collapses before 45 -- below $45 a barrel. billouse -- health care breeds life into tax reform. from york city, good morning. a warm welcome to luber daybreak. alix steel is off today. we're counting down to the market open. the session looks like this. futures are going nowhere. the euro retreats from a high. we are looking at the second round of the french election sunday. david: beyond the payroll report we will look at the rig count this afternoon. we will start to hear from fed members after their meeting this week. stanley fischer will speak out at stanford. janet yellen