manus: one belt one road, china's president hopes a summit promoting his trade and infrastructure plan. u.s. commerce secretary wilbur ross announces a trade deal with china. the group of seven. greece is expected to steal the limelight on trade as a central bankers gather in italy. we are live. the u.s. president tells nbc news he would have fired james comey even without recommendation from the justice department. ♪

anna: welcome everybody to "bloomberg daybreak: europe." i am anna edwards. let's get straight to the blank -- breaking news. we will talk to the management of these companies. we have numbers coming in. this is the steel company, now much more diversified industrial group. they are raising their even forecast to $1.48 billion. raises.sted ebit raising their profit outlook after selling their brazilian plant. agreed to sell their brazilian steel plant, and it is making the transformation from steel to diversified groups. around see what they do

their american unit. there is the expectation they will exit the business. there is talks they will transfer the european assets. we will get an update on all of those matters when we speak to the management. inwill talk with their cfo 45 minutes time. let's get to other breaking news . sticking with germany, this is the munich-based insurance company. we are getting numbers. or solvency ratio is 212%. euros.lows of 21 billion operating profit is comes -- confirmed at 10.8 billion euros, less or menace -- -500 million. we are looking for guidance because we heard some of the numbers. we have heard their operating focus isse by -- the

on the profitable optimization's -- operations. they are trying to optimize their business. we will talk about all of that with the cfo, who will join us in an hours time. we have early numbers in the steel space. let's get to more numbers in that sector. one is coming in at $2.23 billion. that is higher than the estimate. they say the outlet -- outlook 17 remains unchanged. they say they expect market conditions to be broadly stable in the second quarter. interesting conversation. analysts going into these numbers are focused on a host of issues. deutsche bank is talking about

the first quarter, driven by a recovery. the we are talking about focus on potential acquisitions, on the outlook statements. we have some confirmation of an unchanged outlook. let's get to the risk radar and show you where we are on markets overnight. global stocks are close to those record highs, but taking a positive -- a pause. the chinese market is going its own way. there seems to be a worry about the u.s. consumer. real estate and consumer stocks are taking the brunt of it. mainland china stocks are heading to a decline. severales are at billion dollars. that raises the value from chinese values and equities. the chinese equity market is going its own way.

we will keep an eye on that. the s&p futures for you. they talked about the consumer environment in the united states. we will get retail sales. for the moment, futures are flat and gold is edging up. let's get the bloomberg first word news. juliette: the u.s. has reached an agreement that china should provide greater asset -- access as a part of an effort to reshape the trade relations between the world's two largest economies. the agreement covers areas where trade negotiators from the u.s. and china have reached consensus, including market access for financial services. the u.s.e speaking to commerce secretary about that deal at 1:30 p.m., u.k. time. describedtrump has the former fbi director as a

grandstand are, and says he would have fired him no matter the recommendation from the attorney journal -- general. that the fbinbc has been in turmoil for months, and comey was not the right person to help it recovered. >> i was going to fire comey. my decision. >> you had made the decision? >> i was going to fire him. saudi arabia is ready to solidify ties with president trump by committing to investments in the u.s. they plan to spend as much as $40 billion on infrastructure, announced when president trump visit saudi arabia -- visits saudi arabia. 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. it is toward the end of trade here in asia, and you are seeing markets come off that recent rally. the stronger yen a weighing in on the nikkei, up by 0.6%. don't forget the summit begins on sunday. there could be some of the national team getting in on that market. taiwan is coming off of that mark as well. having a look at stocks we are watching, noble group cannot catch a break, plunging again. the chairman of the company is onking away, saying he is likely it will return to profit in the next few years. ipo inle is the biggest

singapore. it's profit beat expectations and holding at october highs. analysts are talking about how we are on track for declines. if you take a look at this, you can see that the composite is at its oversold value. remember that route we saw in 2013, we have seen it come through again this year. it implies that the composite is about to turn around. much.thank you very we will have more on china and the summit in a little while. let's start on what's going on in italy. ek sideline talks are expected to take the limelight. the trade proved to be a sticking point at a meeting in

march. talks of easing greek's workload is on hold. matt miller caught up with the european commissioner about the imf's role in great developments. >> we need them on board, we want them on board. they are involved, and i think it is positive. about that, includes all institutions, including the ecb, the central imf.of europe, and the the imf is a partner that is trusted. matt miller is in italy ahead of the g7 meeting. good morning. it seems like the g7 chief does not see eye to eye on it.

they are reversing to a default issue in economic policy. greece is on the agenda. tell us the nature of those talks. the interesting thing about greece is that the imf is more of a stickler for things like legit, -- like budget forecasts than the eu itself. one possibility is a swapping out of eu debt to repay imf loans. i could be what they are discussing at this meeting. they will not have direct meetings about that, that it will be something they talk about and he expects an agreement on may 22. anna: trade has proved a difficult agenda item for the g 22. has it been left off the agenda, or what is the story on trade? trade isn't officially

part of the track to begin with. we have our own secretary commerce who will be on. you have your minister for trade in the state department. but of a separate track, course it is closely related to finance and the economy. normally, trade would be a huge point of discussion at the meetings. they will put it aside because they do not see eye to eye on commonly agreed free trade statements that they would normally make in these communiques. they do that as a courtesy to steve mnuchin. it will be interesting to see if it comes up, because it is closely related to other financial and economic discussions they will be having. anna: matt miller joining us from italy. more from him as we go to the program. on italy, -- as

they descend on italy, the forecast for the economy remained unchanged. wage growth is moderating and inflation is picking up. house spending and gdp growth has slowed. ,terling has appreciated possibly reflecting market expectations of a more orderly brexit process. we have assumed that the process of leaving the european union would be a smooth one. what does that mean? that means there will be an agreement about future trading arrangements, and there will be a transition for an implement then period from negotiation to that new agreement. anna: let's put these thoughts together and talk to the ceo of principle global investors.

jim, great to see you as always. about china, we will talk about the united states, we will talk about global trade. but let's start with a conversation around europe. seems to be bringing a more hawkish tone. everything we have been reading implies that markets are not buying this hawkish tone. because of assumptions people have to make around brexit. said. carney predictably the working assumption is that there will be a nice free trade deal post-brexit. i think the markets are increasingly feeling the u.k. may exit with no deal, and they are trying to make the best of wto rules, which will not be a comfortable situation for british industry. i think that is where the disruption potential comes from. the -- the bank of england is

genuflecting toward that. i think there is a wide funnel of doubt, depending on the outcome of the talks. anna: i think we can put up this graphic to show how the bank of england adjusted its figures yesterday. what is your case? are you assuming a disorderly exit from the eu for the u.k.? have onact does that your appetite to invest in the u.k. assets at this time? >> one has to assume that this will be troubled. it looks that way from the way the politics are lining up. with a two-year time horizon under the lisbon treaty, we have got the british election in autu mn. we will have the german election. fore is not much time complex trade discussions to happen.

terms,ll, in practical argue against a great deal. to be that the u.k. trade with europe will be somewhat disrupt did. the u.k. trade with the rest of the world will need to scramble for trade deals come because britain relies on the eu's trade deals. i think you have to assert that -- you have to assume that it will be a drag on the economy. anna: the eu may have gotten a boost in the victory from -- victory of macron. but you make an interesting point in your notes. you are talking about bank failure. is this something you consider very likely, not very likely? about german and italian banks testing the new rules. >> this is not a high probability, but it is a classic

risk. the problem with the bank resolution roles, the newer -- the newer rules dictate that retired people hitting their income is terrible. anna: we have seen recovery? >> we see quite a lot of recovery. i would not get overly optimistic about that, because given the weakness of the euro and the pound in the last two years, that would be terrible if there was no recovery. anna: bringing has transatlantic perspective. stay with us on the program. coming up, building roads, not walls. a global investment push, and how it could be at odds with trump's protectionism. that's next. this is bloomberg. ♪ anna: welcome back.

let's get a bit -- let's get a business flash. internet hasted agreed to take control of the german wireless operator. they will risk its stake in a multistep deal. on company plans to take over a french advertising company in a several billion dollar deal. they have offered 2.3 billion euros. there is a 60% stake in the company. the empire spans television and music. that is your bloomberg business flash. 28 heads of state are

gathering in beijing for a summit on revising old trade links between china, africa, the middle east, and europe. it covers more than 60 countries and a third of global gdp. china could pump several billion dollars into this, but will reality match the expectations? our reporter is at the convention. good to have you on the program. what does china hope to achieve from this? tom: i am here at the national convention center in front of the birds nest adm, built during the olympics in 2000 and -- 2008. -- belgian road initiative

without the economic benefits of this. the infrastructure benefits. so far, this program which was launched in 2013, has had mixed results. ratemyanmar, people have -- risen against these proposals. there is concerns around that, but there is a dire need for infrastructure spending. we heard from the asian , there is $1.7k trillion worth of infrastructure every year. the next step for china is convincing people they can finance these projects with private investors. convincing private investors to get on board, that it is worth the risk. anna: thank you very much.

let's get some further analysis. reached ans agreement with china that will give china gratis access -- greater access to resources. wilbur ross says the deal is part of reshaping the trade relation between the two countries. on or repeatuild commitments that china has already made. the significance of that, we will find out as the day goes on. talk about the sultan road initiative. some of the numbers are staggering. you raised concerns about debt levels, as many people do in china. i guess the success or failure depends on the extent to which they can get private money in these projects as well. >> absolutely. improve theto infrastructure to support trade, because they are so dependent on

exports and trade for prosperity and social harmony. china needs to be pro-trade at a , many arearguably turning anti-trade. the populism in the west. china needs to do this. if it can be business for chinese companies, it becomes a classic fiscal stimulus by increasing spending. the negative side is that china is getting too total debt levels approaching 300% of gdp. it is close to the limit. keeping the economy going by increasing debt levels is not going to be viable for much longer. hard to see why china would do this politically. some are calling it china's marshall plan. economically, it is interesting to consider why they would want to do it. this chart shows the existing

focusedrelationship is on the united states, japan, and other countries, some of whom are on this trade route. are smaller relationships, and they want to expand the countries they trade with to firm up that export base. and japan first first. they need to diversify in order to keep the trade going. i think that china also sees an to step into the leadership role of trade. this is a major opportunity for china to forge partnerships with a lot of these smaller trading partners. anna: it is interesting we have seen wilbur ross making these statements on trade with china. i read a piece on the bloomberg about how this does not have to be seen as a threatening plan

from xi. the u.s. can view this positively. maybe this is a sign that beijing is ready. the announcement from the commerce secretary is the sort of pattern to expect from the trump administration. they have made it clear that they do not like multilateral arrangements. beliefs.n basic they did not want to be part of a multilateral relationship. bilateral, they think they can get their deals. an announcement from the commerce secretary is an example of trying to get a better deal from a focus bilateral arrangement. anna: thank you very much. we will get more thoughts on the united states when we come back. and we will talk to wilbur ross at 1:30 p.m.

next, the fbi fallout. the president says he plans to fire comey all along. we will have details on that, and the latest on the u.s. economy. this is bloomberg. ♪

anna: welcome back. "bloomberg daybreak: europe." it is 2:30 in the afternoon in tokyo, where the dollar is weak against the yen. get -- we are waiting for breaking news. we have not had much in the way of company earnings -- here they come. information about buybacks. has axury goods maker share of one swiss franc 80 a share.

profit, 1.6 7 billion. that is ahead of the estimate. the sales number misses estimates. profit alsor net missing estimates. it falls by 4%. this is the maker of cartier giuliani -- jewelry. this is a year marked by and job cuts.acks something of a bottoming out in this sector. y ine was a recover shipments to china. a few luxury good companies have beaten estimates in this last period. we will keep an eye on it when it opens. let's turn to a new edition of ," which is available on the bloomberg.

we start with german politics. the cover story is merkel. the german chancellor's chance of another term will be tested this weekend. the regional ballot is the final for her challenger before the national vote on september 21. this one has a greater significance. the next story is german growth. gdp for the first quarter will probably show a 0.6% range from the fourth quarter. we will also get cpi data for europe's against economy. we will get those numbers in 30 minutes time. we will see that conversation when they step away from an external stimulus. let's talk about what is happening in the united states. donald trump under the spotlight fbi director james

comey. according to the white house, the president was taking the advice of two justice department officials. in the interview, the president offered a different account to nbc. >> i was going to fire comey. it was my decision. >> you have made the decision? >> i decided to fire comey. there was no good time to do it. he is a showboat, a grandstand or. the fbi has been in turmoil. if you take a look at the fbi a year ago, it was in virtual turmoil. less than a year ago, it has not recovered from that. anna: president trump also rejected claims that he has any involvement with russia. nothing to do with russia. i have no investments in russia. i have no property in russia. owned officet i buildings in moscow, i do not

have property in russia. i am in total compliance in every way. the ceo of principal global investors is still with us. this storyou look at around the fbi and the firing of james comey, many people were this isow significant from an investor's perspective? what does this tell us about the way the man operates? about the ability of the white house to get other legislation through? it does not seem to have distracted investors. >> not a lot, no. i do not think the higher share thees have a lot to do with trump agenda coming together. i would point out that from the middle of last year, u.s. company profits were doing better. thend 18 times earnings on s&p.

that is not a stretch. good profits were a primary driver of the market. the other point the market has been focused on is the hope for tax cuts. the one where any disruption like the firing of mr. comey, the congressional backlash there, because republicans have been critical of this. it has been a partisan criticism. harder for it president trump and the administration to manage congress, that is very bad news for the pro-market agenda, just basically tax cuts, and the regulation spending. anna: this seems like a distraction. why don't investors worry? or do they, and we are being dazzled by the bright lights? >> i think the s&p has been driven by modest rises in interest rates, low interest rates, which makes the yield on the s&p still attractive.

i do not think we are in stretched valuation. yet -- stretched valuation territory yet. the market would like to see tax cuts and the regulation. -- and degregulation. was notthat the market down very much, and that is the psychology. they are still a little apprehensive about the execution of the agenda. anna: we put together this charge which is around the trump trade, and this is categorizing --mp says pro-trump categorizing companies as pro-trump or anti-trump. see that the pro-trump trade did well in november, and has since unwound to levels that we saw before the election. sticking to the

earnings story and not getting distracted by what trump has promised in his legislative agenda? >> i think it is the three things that are on the positive got executed,y that would be on the positive side. i would say some of our investment teams are focused on the good underlining view of the u.s. economy, partly driven by the administration, that were driven by how the private sector is doing. u.s. private sector is the reason to be in u.s. investments, the cousin has a lot of technology, because it is protect it. those are good reasons to be invested in the u.s., regardless of whether washington helps or hinders. anna: you see a lot of that excitement around the small and mid caps till -- still. i think there has been some recovery in europe and japan, it may be temporary given that some

of it is predicated on currency changes. i think the u.s. is a preferred destination. anna: you do not see valuations in the u.s. as a stretch at this time. do you are concerned about volatility? around the lowest in a decade, since december 1992. 3. are you concerned about a lack of volatility? >> i think that is possible. that theittle worrying market appears, in that measure, to be complacent. we do see plenty of investors a fairsh balances, still amount of money on the sidelines. ,his has not been able market it has been -- this is not been a bull market, it has been an apprehensive market. the good news that i don't think anyone is all in on this market.

that predicates well for what comes next. anna: where does that leave us with the fed? we had an interview with jacob and he thinkson, the fed should continue to raise rates, and not doing so can be harmful. fed is of the view that the u.s. economy is operating close to capacity. i think that is there central view. 4.4% on unemployment, suggests the capacity to grow is very li mited. i would expect to see 25 basis and probably one more raise this year. i think the question is, will the economic omentum continue -- momentum continuing until 2015 -- 2018?

that gets you to a short-term rate which feels right at this stage of the recovery. i think that need not push up the 10 year yield. this could be accommodated by yield curve flattening. you have talked a lot about technology and the adoption technology -- of technology. how does this affect wages in the united states? thisis something that sets cycle apart from others, and explains why we are not seeing wages higher in the u.s.? >> i think we are seeing wages higher -- not budging very much. ofhink the signs are there, labor shortages affecting private sector employers having to pay up for skills for some people.

the underlying looks like you're heading to 2% or 3% increases in wages. that is against the deflationary impact of technology. setink that is quite well for the next year or two. anna: thank you. let's turn the conversation to the oil markets. it is set for its first monthly month.ain in a it is set to derail opec's plans. its alliesation and are digging in for a war of attrition against u.s. shale. joining us is will can is he. -- will kennedy. there is a short-term trade and this longer-term picture about how opec's strategy is evolving. how has this changed since

davos? now they are faced with a different reality. he said my plan will work. we will do you access stockpiles. phasesix-months, we can it out and go back to status quo. that has clearly failed. it is clear that the saudi minister has extended the cuts through the rest of this year and into 2018. it seems that opec in its battle to bring global stock piles below average -- u.s. and travel in the speak to people in all industries. what is your perspective on shale in the united states? the parts ofwn in america that have done well? >> the stunning thing about the u.s. off share -- offshore

progress is how they've used technology to get prices down. out with $80 or $90 a barrel. now it is about $40. $40 a barrel is the profit rest of -- profitability threshold, then opec does not have much of a chance for keeping the price above the current level. anna: we have some quotes. our break even prices at $20 a barrel, we are making good returns. >> what brings this home is when you are looking at reduction. -- at production. meets, it willc be pushing on that 9.5 billion dollar point. texasrig on the ground in

, they are getting more oil. they have longer wells learning how to unlock secrets of these shale fields, and it is transforming the industry. it is something opec had not reckoned on. higher, andices makes u.s. shale more profitable. it allows them to lock in profits by hedging. they are in a tough position. anna: it sounds like longer is lower? >> that is right. your countries like venezuela that need the money, and they will pump what they can. it is fine for saudi arabia and russia to preach discipline, but there are other players in the world who have no interest in that discipline. the saudi's are in a bit of a box because the flow to saudi aramco will be more difficult if the oil price goes down. i think they need to try and keep discipline for another six

months, keep it where it is inconsiderate a victory. but oil is plentiful. i do not feel two of the handset -- to apprehensive. thank you both very much for spending time with us this morning. you are aer, if bloomberg customer, you can watch the show using tv . you can follow the charts and functions we put up with our conversations. you can ask guest questions as well, it use the button at the bottom of the screen. program, andthe outlook is raised for profits. find out how certification plans are taking hold. that's next. this is bloomberg. ♪ anna: welcome back.

it is 6:48 here in london. let's have a conversation with

thyssenkrupp shortly. we have numbers coming in from italy. this is italy's largest utility company. it is coming across the bloomberg now. it is at 183 million euros. that is better than the estimate . the revenue number for the first quarter is also beating estimates. this company is seeking to extend outside of europe, where profit margins have been narrowed. we have heard about their expansion plans in mexico. we will watch the open, but let's get the businesses flash. netmarblegame maker jumped in trade, part of south korea's biggest they view in seven years. it has a market value of $12.4 billion. ago --founded 17 years

seven years ago, and is a rare entrepreneurial success in a world dominated by conglomerates. even also been responded to buy imposter.er -- by an a shareholder was criticized who had sought to oust staley. the ceo responded with praise, comparing his skills on the guitar to that of eric clapton. anna: fascinating story. let's get back to the reporting season. ebit forecast was adjusted. the german manufacturer posted net sales ahead of expectations. we are joined by the ceo, guido kerkhoff. welcome to bloomberg.

tell me about the visibility you have for the business. where is the confidence coming from to raise your full-year ebit forecast today? >> if you take a look at the numbers and outlook we have seen, based on the intake we saw , especially confirming the industrial side and across all regions where we had a strong order intake everywhere. a record high. that is giving us a clear outlook. and we see in steel materials is confirming on that side as well, driven by the price hikes we saw and that negatively affect our cash flow. on the other hand, on profitability, it is a good outlook for the year. it could be better than what we previously thought. anna: if investors are worried about a slowdown in china, what is your work in china telling you? should we be worried?

divisions weggest have there are component technologies, so the auto sector, light vehicles, continues to be strong, so we are growing nicely and japan -- in china. the second thing is, there is some price competition, but we keep growing pretty nicely. overall, we are not much concerned about china. anna: can i ask about your debt to equity ratio. it is within 250%. put that in context for us. you have an agreement with banks to not exceed certain levels on their equities. give us those numbers, and what are your intentions? do you plan to bring that ratio down? have covenants we have only tested once a year in september. the ratio is high today, but you see we had to reflect our sale

of the brazilian asset in the books, which was a loss of $900 million. but the deal is not closed, so $1.5 million coming out of that. top of that, seasonably our cash flow is always stronger in the second half. the first half was more negative due to the increases in the raw material process, so we have confidence that we will make it. you don't seem too concerned on that front. can you give us an update on your joint ventures? what is holding things up? it has been more than a year since it was announced. is it around unions are politicians? -- unions or politicians? >> we have always been clear that what we need to see with

qatar as a joint venture, clearly be u.k. is an important thing. a lot of progress has been made. to sell the business. they sold specialties. that was a big part. big one. is a i see them moving forward, but there is nothing that can be expected very short-term, and couldn't be a year ago, because significant totals have to be taken. anna: do you have any visibility on win this will be closed? any guidance for investors on that? >> know, because i am not the leading force there. you can see them talking about the u.k. and having to see outcomes. we will continue our talks in a confidential manner, but we need

see these outcomes before we can finally judge. anna: some investors are wondering what plan b is if the plan does not go through. are you having conversations with other kinds of strategic sellingof thyssenkrupp other parts of the business if this doesn't go through? >> i think we have demonstrated with the sale of brazil that we are on track with what we wanted to deliver. we have proven that we diligently do our job, and do our best creative solutions for the company. as i already stated, we are moving ahead -- it is moving in the right direction. we need the patients to see what the outcome is. the biggest threat is what is happening in the steel factor. consolidation is needed. we have overcapacity in europe.

the outside in, the biggest opportunities there. we are working on it. there is no time to talk about anything else. mention brazil, you have done that deal, but you mentioned that the cache is not in yet. when do you expect close? decisionsdepending on that need to be taken by the brazilian regulator, and some other stuff. we have received approvals in germany and the u.s., and that is why we are depending on others and need the approval of the antitrust authorities. anna: thank you for your time this morning. great to get an update. guido kerkhoff, cfo of thyssenkrupp. frome moments away inflation data from germany. how europe possibly biggest economy performed in the first quarter of this year.

to anothereak ceo. how strong have inflows into pimco been? what does that tell us about investment plans for this business. this is bloomberg. ♪

anna: one road. time as president hopes world leaders of the summit, promoting me $500 billion trade and infrastructure plan. u.s. commerce secretary wilbur ross announces the initial part of a trade deal with china. the group of seven. greece is expected to steal the limelight overshadowing talks on trade. central bankers gather in italy. we are live. the u.s. president tells nbc news he would have fired james comey, even without recommendations from the justice department. his comments contrast with earlier assertions from the white house. ♪

anna: a very warm welcome to "bloomberg daybreak: europe." i am anna edwards. we have data breaking from germany, most of which looks to be in line with estimates. gdp and cpio the number. 0.6% was the quarter on quarter growth estimate we were looking for here. we have had that confirmed in the actual number today. core gdpter on quarter growth from the german economy. sterling recovery in the euro area. one of the things helping the export sector benefit here within the eurozone and indeed the broader economy. mild weather boosting construction in germany itself. the european central bank starting that debate. business sentiment in germany is at its strongest level in almost years.

an appointment falling. we saw the european commission changing its growth forecast, saying growth in the nation euro area will be stronger than previously expected. this in line figure on growth in thenes that picture eurozone. let us get to the cpi number. german april harmonized cpi up by 2% year on year, in line with their preliminary estimate. germany, ith allianz had 21 billion euros. 10.8 billion euros. plus or minus half a billion. munich is now from the cfo in his first interview of the day. dieter, great to have you on the program. would you say that there is upside risk to your forecast you have been telling the market --

confirming to the market today because of that strength in pimco? uh, good morning, anna. thank you very much for the question. yes, 2.9 billion and profit in the first quarter. we are 200 million ahead of our outlook for the year. is always a volatile business, so it is too early to address our outlook. pimco is on a great turn for recovery. we had the last quarter in q4, and now q1 continues, and i think q2 will also continue the success story of pimco. anna: how sustainable do you see that success at pimco? clients flocking to your pimco income fund, it seems. how sustainable are the inflows? what do you see in the crystal ball? dieter: the crystal ball is that

pimco is really doing nicely, and is well recovering. we are in a very volatile world. we hope that we can surprise more often in the coming quarters. anna: we will take the surprises as they come, dieter. tell me about your appetite for m&a. you spoke to my colleague manus earlier on this year. you said it was not on the immediate list, but opportunities would be evaluated. given the strength of the performance right now, do you have more appetite to do m&a? would that come in the united states? dieter: uh, look. with $2.9 billion operating profit and trust in change in the famous discount rate in the u.k. spoiling our party to reach

the upward in costs within the quarter, to see that we have a lot of organic potential in the company to produce profit -- if there comes an opportunity, we take it. that is really opportunistically, we are executing straight on our 3 billion share buyback. we have a very strong capital position, so we can really move in all directions, and we can sit and wait and look for good opportunities. anna: you announced a big share buyback, and i know you have talked in the past about, you know, having the into structure in place to do more if you decide to. is there any interest in doing further share buybacks in the future? we do not expect them every quarter, but any insight? well, let us first execute the 3 billion at the end of march. we have executed close to one billion. shareholder our

meeting, we continue to execute because we had to stop from a legal point of view before the shareholder meeting, so let us first finish the 3 billion and then we will talk about next steps. mentioned the often rate. are we through the worst of the impact? give us an update on how that is impacting your company. you seem a little disappointed in the impact it had on the top line. uh, topline impacted is a reserve strengthening for last year, which cost us roughly one presented point in our combined ratio. that is off. i think the u.k. market has certainly a good recovery. rates oftranslate -75-based points in the macro economy, i the u.k.

think that is a very grim outlook for the u.k. economy, and therefore, i was really surprised that somebody would have a long-term so negative view on its own country. [laughter] anna: yes, it is interesting to unpick that. what is your view of your exposure in the u.k., your investments, your business in the u.k. as these exit negotiations continue? what is your attitude to u.k. investments? dieter: uh, we continue to run our local business. we are not brexit dependent because it is local legal entities. our insurance businesses have their own caveat. think, do andi service our customers, unchanged. of course, we are dependent also in the growth outlook, how do you kate economy is developed -- the u.k. economy is developing.

anna: politics has been at the center of things the first five months or so of this year. are there still political risks on the horizon that you see in terms of the eurozone? think, withi postelection in france, we see ourselves very well positioned. germany, ourt to second largest country in europe. inare well-positioned there the life and corporate casualty business. we also have high exposure to french investments, much bigger than our u.k. investments. i think when you look at outlook for continental europe, i think we are very well-positioned to benefit. anna: very well-positioned. we just got confirmation of the zero point -- 0.6% growth rate

for germany. the german finance minister is it but in the ecb to change monetarynd to tighten policy soon. is that your extradition? would you suggest -- is that your expectation? would you suggest that was a good idea? dieter: we are investing many hundreds of billions of euros for our customers, and when we can invested at higher rates, we would be really delighted for our customers and also for our shareholders. you have an expectation that the ecb will change course soon? jumpr: i think i would not to early on this train. the ecb will take a very andured and careful step, certainly waiting to let beside fed gost, and -- let the first. i would not build a strategy on the early rise of interest rates

in the ecb. anna: they will take measures and careful steps. thank you for your comment on that, dieter. each of them are -- dieter wmmer, joining us from munich. juliette saly. juliette: the u.s. has reached an agreement for china to provide greater access to american natural gas exporters as part of a broader effort to begin reshaping the trade relationship between the worlds two largest economies. covers 10 areas where trade negotiators from the u.s. and china have reached consensus, anduding agricultural trade market access. we will be speaking with wilbur ross about 1:30 p.m. u.k. time. in the u.s., president trump has described former fbi james comey as "a grand stander," and says he would have fired him no matter the meme at the nation -- no matter the recommendation.

he also told nbc that the fbi has been in turmoil for months, and that comey was not the right person to help it recover. pres. trump: what i did is i was going to fire comey. my decision. >> you had made the decision before they came into the room? pres. trump: i was going to fire comey. there is no good time to do it, by the way. isiette: saudi arabia preparing to cement ties to president donald trump by committing to unprecedented investments in the u.s.. according to people familiar to spendmatter, a plan as much as $40 million on u.s. of a structure may be announced next week when trump visits saudi arabia. a white house official confirmed plans were in the works. a representative declined to comment. general election campaign takes shape, the opposing parties are taking increasingly barbed -- they are concerned that the labour party has deserted them

and jeremy corbyn is to launch an attack on theresa may's foreign policy. another politician has called for a different approach to the election. electionul of this must change. it is time to regain the people of wales, in the whole united kingdom, some hope. who says britain must now of agle under the yoke one-party state led by theresa may? news, 24 hoursl a day, powered by more than 2600 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . australia and japan closing out the session here in asia. not a great day for both of those market today. it has been a very good week for asian markets. their best week in two months. the nikkei closing down by .4% on a stronger yen. have a look at the csi 300 and the hang seng. solid moves in these markets. ands the summit on sunday

we could be seeing the national 10 by into the chinese equity markets are bs it down by .7%. iex kayaks close -- ta slipping away from that level today. having a look at some of the stocks we have been watching, hit hardup against her the chairman and founder of the company walking and also noble group saying he does not expect it will see a return to profit for quite some years. ipos the biggest debut or in south korea in seven years. quite a good debut. the internet service provider in japan doing quite well. october highs coming through with solid numbers for the quarter. is an interesting chart if you are a terminal subscriber. it is starting to show that even though we have seen a downturn coming through on mainland chinese stocks, the shanghai composite at the most oversold

level since 2013, so a lot of technical analysis suggesting we could see a rebound in that market. we have seen buying in the last couple of sessions. billion wiped60 from chinese stocks in this most recent route. anna. anna: thank you very much, juliette saly, in hong kong. we have been covering the g-7 meeting. matt miller is on the ground for us there. we have common coming through from the governor of the bank of japan, hirohito kuroda, speaking at the g-7 meeting. he says price rises have been slow recently, talking about being asked about a range of subjects. that is talking about what is happening in japan. on europe, he finds himself in a philly. he says it is important for italian banks to deal with high nonperforming loan ratios. interesting. we caught up with jim mccaughan. one of his concerns around the eurozone, despite things looking calmer on the political front,

was the potential for banks to fail, to test the relative resolution mechanisms here or in the eurozone. let us put that to one side for moment and talk about what we expect to see at the start of the european equity trading day. we could start the last trading day of the week in a positive move, of pipe 2%. -- up like 2%. we have had some m&a news coming through from spain, coming through from france, coming through from germany. all of that could but interesting momentum behind a few of the stocks. the ftse 100 could bring up the rear in today's trade. 7:15 in london. up next, details of a new trade deal between the u.s. and china. that is coming up, next. this is bloomberg. ♪

anna: welcome back, everybody. "bloomberg daybreak: europe." berlin, almost a sunny morning in germany. that .6%nfirmation of quarter on quarter growth number out of the german economy. it does not seem to have moved the currency market in euro-dollar all that much of this morning. let us talk about what is on the agenda at the g-7 meeting three greek bailout talks are expected to take the limelight at the g-7, a meeting of finance ministers, after world trade group two to be a bit of a sticking point in march. talks on eating greece cost debt ce's debt load. matt miller asks whether a minister will likely have meetings on greece over the weekend. aboutm not talking

precise meeting, but we can have the occasion to discuss the euro there. it is positively in our mind, because since the happened, since the stock level agreement ended to the climate of the talks, we can be reasonably optimistic that we can have an agreement and a satisfactory one in the euro group of the 22nd of may. we are working with that. the commission is positive. we believe that the greek authorities are not delivering reforms that the necessary adjustment is being made, that also we have the opening for growth policies in the future, and yes, the climate is quite positive. so we are not yet their. while, it is a work -- not yet there. it is a work in progress, really progressing. matt: do you think the imf will be on board as well?

pierre: we need the imf on board. we want the imf on board. discussions with the imf. the imf is involved. it is positive. when i speak about it, it includes all institutions, meaning as well be commissions, the ecb, the central bank of europe, the mechanism for stability in europe, and of course the imf, because the imf is a partner that is trusted, and that is also credibility through its own program. and for that, we need to work on debt measures, and that is in my view included in our work. matt: what do you expect steve mnuchin's position to be on this? the u.s. plays a big role in the imf as well. pierre: until now, it has not been the case. i know they are interested. i can see that they are, i would well,ather positive, but,

it is mostly a case for , but wes with imf also will have the occasion to ven.k that with ste that is clearly the target, and i think that is not only the target for the commission, but for everybody. the europeans commissioner speaking with matt miller ahead of that g-7 meeting of finance ministers. 7:22 in london. the u.s. has reached an agreement with china that will give china greater access to u.s. natural gas exports. u.s. commerce secretary wilbur ross said it is part of a broader effort to begin reshaping the trade relationship between the two big countries. today brought announcement seems to build on or repeat some commitments china has already made. for more, but us bring in a chief asia economic correspondent for bloomberg news.

great to have you on the program. what is the significance of the agreement? it seems quite significant in the context of the way that the white house has started out by criticizing china and lowered expectations for trade deals. we see these announcements. how real are they? >> absolutely, anna. you have summed it up very well. you have to consider where we were at the start of the year. we had harsh rhetoric towards china and talk of very high high 45% talk of labeling china as a currency manipulator, talk of border adjustment tax. we have gone from there to what appears to be stock standard diplomatic bartering over two-way trade. we are seeing confessions on credit side in terms of card and ratings. these are issues that have been

on the board for sometime. there are concessions on the u.s. side of sending a delegation. on a headline basis, you had to say it is a positive story about trade rather than protection, per se, but when you look onward at it, some of these are re- announcements. lasts first announced september. before i came over here, i found out from the american chamber of congress in shanghai that they will hold off celebrations until the execution of it. we lookat about as ahead to the one belt one road summit that took place over the weekend, a big set piece for china. do they want u.s. backing for this? because the u.s. might send a sort of delegation, but they have not actually endorse it. is that something china is seeking? what else do they want to get out of this? enda: china is very happy to go it alone on this.

this is all about china flexing their muscle and strutting their new stuff on the global stage with the american superpower. they are talking about putting hundreds of billions on the table to fund infrastructure and key trading partners right across eurasia and the asian region. it is all about building trade links and building chinese soft power, and i think they are quite confident to go it alone. i'm sure they would like the u.s.'s blessing, but they do not need it with 28 heads of state arising in beijing this weekend for the talks. we are likely to see significant contract coming out of that. some economists have described it as a modern-day marshall plan. counterpoints,s and that is of course if a structure project execution is difficult as 10 already knows. you can run into local hurdles, and geographic terrain and the likes. record hasna's track

been mixed. anna: briefly, do they need private involvement in this as well? enda: yes, for sure. there is scope for private investment to come alongside this for cofinancing. the china backed rival of the world bank has been a model. from is open to investment outside of beijing. much, enda you very curran joining us from hong kong. futures stronger at the start of the trading day. not by much perhaps. a little bit of direction this friday morning. the asian session was down by concerns about the u.s. consumer and in fact, that was something that weighed down u.s. market. we have the european equity arkets looking set for positive trait. the asian session down .3%. china going it's own way ahead

of the one belt, one road summit. we have futures pointing downwards in the united states. we get more insight into retail sales and see pi -- and cpi with wilbur ross. this is bloomberg. ♪

anna: a warm welcome to "bloomberg markets: european open," where we bring you the first trades of the day. i am anna edwards. matt miller is on the location in italy. he will be joining us shortly. here is what we are watching. risk in the rearview mirror. are muscovy -- is the euro project back on track? we arelive at the g7. fbi fallout.