anna: a special appointment. the justice department names robert mueller as special counsel to oversee the pressure- u.s. election pro. the decision wins early praise from both parties. manus: volatility spreads across asian equity markets and the s&p 500 plummeted by the most since september. u.s. stock futures suggest a modest rise could be at the open. anna: u.s. imposes new sanctions on iran that keeps the nuclear deal in -- intact as the iranians vote for their next president tomorrow. we are live in tehran. ♪

anna: a warm welcome to "bloomberg daybreak: europe." we're here in the city of london. manus: we'll get straight into breaking news. anna: merck numbers coming through, first quarter numbers from the german health care business, matching estimates. billion, 3.83.8 6 had been estimated. , interestingbitda to see what they say about the outlook. this is been a year that has been pivotal for merck. the health care unit has made steps forward with its first new drug in more than a decade. it was clear to's sale in the u.s. or quickly than expected.

that's where the focus will be. may put itssaid it three divisions into subsidiaries. we will keep and i'll these numbers coming through and will be speaking to the management of this company a little bit later on coming up today in programming on bloomberg. they see full-year net sales of 50.5 going to 16 billion. their are sticking to gut. let's look at the list that we run here in bloomberg. the risk off sentiment grip the market yesterday. wall street finally woke up to the political risk. the question is, is it pricing in impeachment, or just a long, bumpy road. at amazon loss $1.7

billion. in total, are rich list at bloomberg demolished, $35 billion of their wealth. does it marked the end of the so-called trump rally, rather than the type of plunge that -- list with the risk radar up. we can see that little bit .3% on the s&p at the start of the u.s. trading day. remember we fell more than 1% on the indices yesterday. yesterday the s&p 500 down the most since september, the worst in eight months. manus: you cannot beat the classics, they last a long time. up on theg dried

market yesterday. japan actually had good numbers. first quarter gdp actually expanded, that's the fifth straight quarter of expansion in japan and the haven't seen that since 2006. moneyas had five days of sloshing in. anna: the political uncertainty moving from europe it seems to the white house. that will keep gold in the spotlight and keep upward pressure on gold. let's get the bloomberg first with juliette saly. >> prime minister theresa may's conservatives are expected to unveil their party manifesto ahead of the uk's general election that takes place in three weeks time. she will tell wealthier elderly voters that will have to pay for their own care and promise further earlier controls on hiring migrant

workers, according to a person familiar with the plan. they leader pledged to give british people a referendum after any brexit deal has been finalized. >> it's obvious when you think about it, someone is going to have the final say over the final brexit deal. it could be the politicians, or it could be the people. i believe it must be the people. >> japan expanded for a fifth straight quarter, as longest run of growth in a decade, thanks to the continued strength in exports. the last time japan strung together this many quarters of growth was in 2006 and the pace wrote exceeded all expectations. there is concern that spending might falter again with stronger wage gains needed to support household and allow retailers to prices. brazil has plunged back into political crisis following reports that the president was cover-upin an alleged

scheme with a jailed former speaker congress. a brazilian newspaper has reported a tape has been submitted to the supreme court with a secret recording approving a payment to the mastermind behind last year's impeachment of former president dilma rousseff. the press office issued a statement vehemently denying the allegation. global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . risk offto see the sentiment right across asia field through from what we saw in global equity markets. the flight to safety is weighing on the nikkei, down 1.5% despite that better than expected gdp growth. you also have a strong jobs report coming through out of australia and unemployment going down. weakness coming through in the china markets as well.

the tie ask was about 10000 and the beginning of this week and now well below that. hitting a record high in hong kong after its numbers came through well above expectations. first-quarter revenue rose 55%. the biggest lighter on the regional index came through with for your earnings that missed expectations although the ceo says there getting close to hiring ahead of sales and marketing in the u.s.. and chinese property stocks started to way into home prices in april, subsiding from the large highs. looking at this chart, it shows what were seeing in the gdp picture in japan. we did see that expansion for a fifth consecutive quarter as we mentioned, although there is a little bit of concern that japan may not be able to keep its momentum going. very much watching the numbers

to see if we can see the economy turn on that reflation trade. manus: thank you very much. the justice department has named former fbi director robert overer as special counsel the investigation into russia's possible role in the 2016 election. the appointment comes as the white house is reeling from allegations that president trump asked former fbi director james comey to end his robe into the former national security adviser michael flynn. anna: let's bring in jodi schneider. great to get your thoughts this morning. does this appointment calm the waters or change the tone at all in washington and on capitol hill? he is certainly well received as a choice to lead an investigation for the justice department. is respected by both republicans and democrats. dianne feinstein, the top

democrat in the justice department and the justice committee and the senate has said he is and excellent choice. so the white house was able at least for now to change the conversation a little bit. however, the real question is whether they will be able to get back to business on capitol hill. this has consumed so much of their time and energy and it's all been about investigations and the allegations and probes that it's hard to see that there's been a lot of movement in terms of policy and moving forward with the president's agenda or the agenda of the republicans on capitol hill. continue they investigation side by side, is there any sense of a timetable yet? we haven't heard about a timetable. the democrats are saying they want them to move quickly. we heard from paul ryan yesterday, basically said we want to move forward in a judicious manner. but they will continue and their

-- they will go at the same time as the justice department's investigation is continuing. thank you very much, jodi schneider with the latest on what's happening on capitol hill. the allegations swirling were a hot topic in las vegas. set downik schatzker toh a number of executives get their take on what the turmoil really means for the trump train. >> i'm counting on the president to be a leader. i think the president has the competency and all of this unfit for office stuff is just a bunch of stuff. train that we've all embraced and that has driven the market to new highs in equities is coming to an in here. >> we've had more than four months of straight inflows of foreign investment into emerging

markets. reversing the november december trade. the big selloff going back to the u.s., we've already seen that reversed. >> it's going to be a little more difficult. think achange, and i sickly it will create new opportunities. it's more evidence that the markets are pushing back even further, discounting completely two or three, or one or two of fund rates, so some concern, but nowhere near panic. you're not someone who runs around with your hair on ira. let's talk about what this all means, the latest as we heard from our colleague, the justice department naming a special

director to oversee the investigation. marketsof some calm in before the storm? >> this is the first shoe to drop, the allegations, anything which is an attempt to bring some kind of natural administration will pause. the appointment of a special investigator, for example, will allow markets to just take a breath and recalibrate exactly when they should start planning and impeachment. where donaldoint trump is still in power, but were not seeing a torpedo to his administration yet. francis wilkinson wrote a piece this morning saying that washington is enrolling in trump university, and what does it take for republicans to abandon president trump? the markets have a different

interpretation and that's what manifests here. this is the bond market. we've seen positioning here, we're going to get an update on this. money is going into bonds and its turning into a wall of money. >> i think there is the element of republican support which is very important here. brand is being damaged by these allegations and the white house brand has been damaged but the republican brand has not been damaged yet. that's why paul ryan can say he backs the president and the administration. the allegations are somewhat against what the gop party is trying to do in congress. some people seem to think that with this appointment, there can be some returns to other business. paul ryan saying that congress

will be able to walk and chew gum at the same time. the markete saying doesn't believe that congress can walk and chew gum at the same time. >> every minute we debate this is a minute away from health and, away from the wall away from tax reform. it's away from the regulatory reform. all for ave been put couple of months already waiting for some, in game around this. it's probably not going to be done by september and maybe done by the end of the year. there was a lot of faith put in the ability for this administration to get something done in the first six months and at the moment, they're not getting anywhere close. love that line, walk and chew gum at the same time. i thought every american can do -- could do that.

thisr back to the markets, is the proof in the pudding. the window for the fed to do something seems to be getting shaky. the odds of a june hike have gone to 60% from 80% of week ago. this window seems to get narrow were as politics just crashes into it. >> the fed is trying to remain above the fray as it stands at the moment. question is does what happens further down the road in washington impact what happens at the moment. -- still not above wanting to surprise markets. given the improvements that were still continuing to see in the u.s. market, retail sales were pretty awful last week

industrial production -- manus: these markets are paranoid and schizophrenic. we've been told 25 times, they get anaphylactic. >> they do, and the speeches we get will be crucial and set the scene for june and probably the rest of the year if the news out of the trump administration doesn't turn positive. will thewhat extent fed officials come out and say we were counting on any of these policies yet in our forecast? >> they've not talked about it, as far as laying out groundwork of expectations, they have not done that. for them to say we are drastically reducing our charts as a result of the fact that he can close the door, that would be very interesting.

here are some highlights of your day ahead. manus: deutsche bank is holding its annual general meeting today. from and a rate decision mexico at 7:00 p.m. u.k. time. brazil plunges back into political crisis less than he year since the president was sworn in. find out what it means for all the markets. that's next. this is bloomberg. ♪

manus: there's a lovely shot of hong kong. you can see the hang seng at the bottom of your screen. dropped over 1% at the start of trade, very much following the political machinations in the united states, the selloff of u.s. equities.

those concerns over the trump administration seem to have dissipated with the new prosecutor having been appointed. the hang seng tears its losses for the day. we talked a lot about the united states in isolation. we still have emerging markets very nicely yesterday. 6.9 to the dollar, facing pressure as we see what develops from capitol hill. upper pressure to the chinese currency. dollar china has been at 6.9 for the better part of six months now. after the august mobile that we saw last year, it's gone very quiet. this is the pboc actually doing their job and should be very happy with the job they are doing. does it necessitate further drop

lower in dollar china? you have the correlation on that pretty good. to back offy have from that if they want to keep it at 6.9? i think we'll have to move down to something like 3%, for example. they also have to sit there and say this is political news, he has been able to extricate himself from political news in the past, so this could blow over. a fresh political crisis following reports that the president was involved with an alledge cover-up scheme. anna: one of the country's largest newspaper reported that approving atape

payment to the mastermind behind last years impeachment of former president dilma rousseff. that's get to justin kerrigan, our managing editor or global markets at bloomberg news. give us the latest. this comes from a paper that exposed a three-year investigation. >> it's a major television media giant in brazil and claims to have a recording supposedly approving some kind of payment to keep him silent, the lower speaker of the house in the brazilian congress. he is now in prison. he was a major figure at the center of the impeachment of dilma rousseff last year. we are talking about a major development here that could

spiral out in any number of ways. spiral out in a number of ways. we've seen protest in the street. what does this mean for the government's plan for economic reform? >> that is the crucial question. if you look at the environment we are in now in brazil, brazil is riding the emerging-market wave of confidence at the moment. he's been at the forefront of efforts to introduce our drive through the pension reform plan that is so crucial to brazil. the markets are like in that. the riau recovered hugely after dilma rousseff's impeachment. the stock market is in a good place. the yield have fallen on the country's bonds, but on the street level, the brazilian people do not like this at all. anything that will cause turmoil in the country is going to be negative. manus: thank you very justin kerrigan there on the latest

from brazil. when you look at this story, it's almost like déjà vu, isn't it? last year this time we were looking at the impeachment of dilma rousseff. politics has always been there. >> the political risk goes back up but everyone's watching that emerging-market currency of the day. they're obviously has been the u.s. fiscal risk which is come back into the crisis and the eeoc and credit nature of the rise in the oil price and the ability for the u.s. to maybe not be as avaricious and trade terms that are boosting these kind of currencies moving

forward, but the reality in a very good spot. and: the yen trading higher these are commodity currencies. trade but the story was nowhere near the canadian dollar or the aussie dollar yesterday. >> it's in a bit of flux at the moment. the narrative we've had around the oil price obviously has boosted these things. the canadian dollar dealing with that and the downgrade of the banking sector in the past couple of weeks, these currencies are volatile within a range at the moment. they are not breaking through levels. as it stands at the moment there is still more volatility to calm more volatility to calm. manus: oil struggles to gather momentum. will hear about the latest attempts by russia to lift

prices as we go to the opec meeting next week. the rapprochement between the two as we've never seen. this is bloomberg. ♪

anna: welcome back, six: 30 here in london, 2:30 over in tokyo. risk aversion trade today looks a little different, unwinding a little bit of what we saw yesterday. equity market session is still pretty weak as the asian equity markets catch up with what happened on wall street yesterday. slightly stalling at the top. manus: mr. macron is probably going to be smiling this morning , his unemployment rate as he starts his tenure has fallen

from 10%, coming in at 9.6%. amen unemployment has also dropped by 31,000. we wrote a couple of stories on this. he would be one of the first presidents to start with a real tailwind in terms of employment. rated at a six year high. growth of 1.3% this year. his come off double-digit unemployment and that is the critical point in that story. let's check in on the over the last 24 hours. it has been a busy one. >> volatility has been reawakening from its slumber. the vix cert -- surging the most since brexit. this as were seeing the stock selloff that we saw in the u.s.

spreading to asia. the s&p 500 dropping the most in september and yesterday's session. the msci asia-pacific index lower today as well. we're seeing other assets showing a little more calm after wednesday's sharp move. so the dollar coming up for air, the bloomberg dollar index recovering slightly from that six-month low. the dollar in has been in flux but it is higher about .4%. the dollar dropped 2% against the yen yesterday. this chart shows you some technicals. the dollar in broke through in but someesterday technical analyst point out the next level to watch is 109.6. day movingto the 200 average begging the question whether the dollar faces further

declines before reaching that technical support. the 10 year yield dropped 10 basis points yesterday on that bid for safety. basis points eight today. this is looking at treasury futures. speculators building on positions on treasury futures at the fastest pace in a decade. we do get another batch of data due today that could show another increase given this week's action. paling in comparison with wednesday surge in that matches what were seeing as well in the line cash markets in asia. manus: this year opec made almost all its supply cuts that it promised. this week there expected to extend the cuts into early 2018 as the nation tries to tackle global surplus. i asked if this was a moment of

hope or desperation. >> it's an important move for opec, obviously, to see if the supply of oil can be moderated. however, there is a large amount of oil around, and it takes a lot of activity to moderate that supply. ,eople have tried in the past not to say the past is always a good indicator, but there was a large amount of supply in the 1980's. prices came down, people adapted to low prices to such an extent that the supply was pretty well overhand for 17 years. compliance, this time around, we're netting 96%. does that surprise you? >> it doesn't.

it's good to see that people are much more in tune with the data. past, it wasn't as transparent as it is today, so people are aware of everybody watching them and they keep in compliance. it is important for them to see if they can reduce the overhanging supply, but it is a big challenge. manus: trying to rebalance that market. you have been around a while. has opec lost its swagger? that -- an article would you agree that it has lost its swagger? still alivepec is and well. it's a big you been written many times, but it is alive and well, and tries to manage the market and give the market some stability. it can do it if it is on the margin of adjustments. but this is much more than the margin. we have a big supply, we have

technology attuned to lower prices, producing more supply. also in the offshore. manus: do you think the oil thestry is surprised at fractures, because they are aggressive. >> 10 years ago, people would of said it's an interesting marginal bit of activity, not something that has revolutionized the supply in the world, and it still in its rough beginnings. there is plenty more to do. morecan certainly squeeze technical efficiency. the cost may go up because the supply chain is being stressed, but technically, there is more to go. manus: i'm curious to know, the russians and opec, why do you think there is a grand coalition, this rapprochement between the two?

why now, and what is driving? >> i would expect the mutual advantages to get the price of oil and to make sure that it is stabilized. clearly it's a very important part of the revenue base of russia. their margin has much improved because the ruble has devalued and therefore the cost they has gone down, but nonetheless, revenue matters a lot. manus: $52 give or take a penny or two. where you think it will push oil to? i've never forecast of price it's unlikelyay that something will happen that will be sustainable for the long-term. how themore time to see very long-term changes in the investments and supply will come

up with a change in supply. think the word you take away from that is sustainability. it suggests there is a lot more to go on that from the u.s.. let's talk about politics in the middle east. the trump administration -- the developed come as a ring is prepared to vote in their presidential election on friday. manus: the incumbent rouhani faces stiff opposition from the conservative cleric. use of, good to see you. it must be exciting to be there to cover this. donald trump's overnight sanctions come at a sensitive time. what does it mean for

u.s.-iranian relations? they were not exactly high as we went act -- as we go into the election. yousef: the united states and relations have been fundamental. the fundamental part of the iranian electoral campaign rhetoric since the islamic revolution of 1979. that is likely to feed the flames of some of the ongoing rhetoric even though they're not allowed to campaign in he, effective today. a lot of skeptics are saying what does he have to show for the new deal with the u.s., or with the oral agreement with opec. many feel it has not trickle down to the average iranian here in tehran and across the country. it shows you the balancing act the united states is trying to achieve, the latest coming through punishing iran for development of its ballistic missile program and a china-based network understood to be in contact in iranianation with the

military. here's what steve mnuchin had to say in a statement, underscoring the administration's commitment to countering iran's destabilizing behavior. it is alarming that individuals involved with iran's missile program are insisting the brutal assault regime, taking action to cartel this behavior. -- to curtail this behavior. jointation to the conference of plan of action, and ultimately it still ongoing. the notification that they are in compliance happens every 90 days. the electoral of event coming tomorrow, water of the internal challenges facing iran right now? comes down to the

economy. that's why spoke about it not trickling down to the average iranian. starting with what's happening with inflation, a remarkable turnaround story. you're looking at levels of inflation about 30 years in the almond in a job government -- you're looking at consumer finances across iranian households. the second chart i want you to pull up is relating to economic growth and unemployment. that is fundamental to the story here. economic growth has rebounded. now up.down 6.6% and unemployment is still relatively high, hitting the youth especially hard. those are the key metrics.

a largerd also be strategy to define who's going to succeed the supreme leader. manus: thank you very much, great reporting. fisa net -- fascinating times in aramco no iranian president has lost the bid for a second term in the history of the republic which was founded in 1979. let's turn our attention to a very different story, the british prime minister theresa may will promise to impose further controls over it immigration by doubling the levy charge to businesses for hiring migrant workers. manus: the conservative the tripleill drop lock, a pledge to balance the deficit by 2025, according to the telegraph newspaper and the

general election is only three weeks away. liberal democrats had their manifesto last night. were beginning to see some of the current results. story is much of a this election? of herust that the size majority matters for her powerbase? >> the conservative vote will hopefully give us a better interpretation of what kind of brexit she is looking for, whether we see the labor seats which north of england had a strong turnout in the 2015 blue for if that goes theresa may, based on the belief that she will go out and deliver a brexit controlling immigration as she's talked about.

anna: under the leadership of george osborne, running an editorial suggesting there are no senior tories in the party. none they go along with the idea of cutting back on immigration. i should point out that the latest polling suggests the gap between the conservatives and labor is 13% in this particular poll. the brexit bill is one of the precursors to beginning the brexit negotiations. i found this fascinating, they say the bill could be as low as $6.5 billion. ultimately, the amount the u.k. flying,, is this kite

it's not lighthearted. x a lot of people seem to be going for the conservatives, anything is too much. also the u.k. voters who are tending toward the conservatives, we started with about 50 billion and the u.k. came out with 100 billion. were not going to get a deal on trade, which brexit will live or die by it still on trade. we won't get a deal until the bill is settled. manus: this is where there is a divorce. we look at this yesterday. what changes the narrative, does the super majority shift the dial above 130?

>> yes it does. we could get as high as 133-134. the markets love of mandate in a government that's able to go out there and do exactly what it wants to do. anna: on the domestic front, perhaps. >> you go to brussels and if they say were all here because we have a majority, that's a politic works. she gets home without much of a deal. anna: we will continue in just a moment. manus: if you're a bloomberg customer, you can watch the show on tv . you can enter the conversation or be tough with the guest, jump into the conversation. give jeremy a heart question, i say.

anna: hello to the new cfo. will preview deutsche bank as it introduces its newest member this week. that is next. this is bloomberg. ♪

york, finally politics have impacted the east coast market. s&p futures sought demolition in the equity markets yesterday. this morning, a small moment of reprieve as the x fbi chief is named as a special counsel on the russian probe. to what extent does that affect the markets? york.0 a.m. in new let's get the business flash. systems slid cisco as the internet equipment maker onecast sales that fell

analyst estimates. below the average analyst forecast, the california company is being challenged by an industry shift toward cheaper software-based networking. google is making another attempt at getting cheap android phones to support its latest software. makes features into the operating system designed specifically for cheaper phones. the service announce yesterday will launch next year. investment by china's largest internet company is game in off. sales record quarterly and profits topping all estimates. the company strategy of isckpiling rights

transforming it into a hybrid model. that's your bloomberg business flash. manus: thanks for the roundup. let's talk about deutsche bank. cfoill hear from the new and we will also be watching for any clues on strategy from postbank along with its possible ipo of the asset management is this. a big day for deutsche bank. what should we be focused on? one of the things we will focus on his hearing from the new cfo. previously the treasurer at citigroup, he worked also at morgan stanley and jpmorgan as an investment banker. little-known fact maybe that he dissents from a prussian military leader and is someone

who was executed by the nazis as part of the hit were resistance in 1945. that probably won't play huge role in his job as ceo at deutsche bank but he will hear from a lot of angry shareholders , as will the ceo because they reversed course on their strategy a couple of times. shareholders are concerned that the have not really got guts to push through the current strategy which is to keep and reintegrate postbank and to do an ipo of their asset management unit. investors want to watch closely to see that they will be willing to do that, as well as use the money they've recently raised $8.5 billion in capital 2010, and really make the bank a viable profit leader again. they'verobably know, been hiring traders recently

especially in the fixed income area in hopes that the trump administration will loosen regulations and they will be held to continue profiting and take shares from the u.s.. anna: the latest on deutsche bank. plans to govern in the interest of mainstream public, which is an interesting phrase. she also promises a smooth and orderly brexit. smooth and orderly, that's what we're talking about this morning. we talked a lot about the u.k. and what we will hear and how much this matters. let's talk about the eu 27 and the eurozone countries. for euro strength, either with or without dollar weakness.

explain your views on that. >> the dutch and french , in the cabinet building macron has started to put together seems to show that regardless of how well he does in that legislative elections that he will be up to form coalitions on certain policy matters moving forward. his reform agenda does not seem to have been torpedoed already. the macron merkel meeting on monday seems to have gone swimmingly well. everyone is now talking about new solidarity moves. starting to bring back that sort of access within europe, and the data over the course of the past month has been uniformly pretty good. this is french

unemployment, 9.3%. this is good news for macron. the euro has had quite a good run. is there a possibility that the flow of money is still moderately underweight in europe? sterling could get as high as 90. there's obviously the risk of sterling weakness baked into that case. euro-dollar as well, maybe another 3% or 4% based on that. the unemployment rate is still at 9.3%, there is a lot of improvement to be seen in the french economy. this is the main barometer by will mark how well the crawler is doing. we have six or seven elections coming through. anna: jeremy, thank you for your time this morning. up next --

manus: we will bring some luxury numbers for you. burberry reports its earnings. will joinial guest us. ♪

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u manus: special payment. special counsel to oversee the russia u.s. election probe. the decision wins early praise from both parties. acrossolatility spreads asia mcclain markets after the s&p 500 plummeted why the most since september. stock futures suggest a modest bounce. election. iranian the u.s. impose new sanctions on iran but keeps the nuclear deal intact. this comes as iranians vote for the next president tomorrow. we are live in tehran.

you're welcome. it is bloomberg daybreak europe, our flagship morning show here in the city of london. and a welcome to the program. it has gone 7:00 a.m. in london, breaking news coming across the bloomberg. last securities giving us an update. they give us their adjusted share at 48.3 pence, pretax profit numbers coming through. profit of 100 12 million pounds. interesting to see what sort of outlet statement they give, that will be interesting. given what we heard yesterday from british land, we expect the ceo, he seemed composed about the challenges that brexit will impose. we talked that she talked about the challenge that retail will come under and how they try to manage that. we have yet to see anything on the outlook but that will be

typical. manus: companies have held onto the for your outlook after a good start. let's talk about burberry and luxury. burberry comes in 2.7 7 billion as it is bang in line with what the market wanted to see. that is pre-much it. they put 100 million pounds of cost cuts into the business. the back end of last year. they are -- they are taking it premium.on- that eats the street at 457.1. never far from a dividend. the issue of the first quarter at burberry to issue a fourth -- first quarter training update. they hold the agm on july 13. the new ceo taking over there, looks as if those numbers are bang in line. a little bit of royal mail. anna: that is coming in. adjusting their eps beating

estimates. was 40.7.te also bidding on the revenue line. are at 9.63. politically very topical. the labour party have made it known what they plan to do with this business should they get into power at the forthcoming election. is what the polls show it now. a quick line on securities. capital return is something that is topical in this business and they have given us a little word on the outlook. they say it is unlikely for london rental values to grow in 12 months. just one last line from burberry. they are sticking with their full-year guidance. full-year revenue will match estimates, that is important in terms of what they are sticking to. one line on national grid. slightly ahead of what

the market had expected and the dividend 29 .01. will have a conversation with the ceo joining the television crew later. anna: yesterday we saw equity markets setting off, risk aversion trade plenty. today in asia that has been the story but they have to play more catch ups and perhaps the european markets do. pointing to a little bit of stability. and so in a month the european market heads a touch lower. futures are suggesting will be down by .3 of 1%. manus: classic risk of scenarios. during the catch-up game. you are seeing the overall asian markets down the most in six weeks. the nikkei is up at the highest level and you have the s&p futures. i like what was written on the .nd lift bog -- mliv blog

is that pricing in a full-blown political hunch up or a withdrawal of support from the president question mark know seems to be the conclusion. that seems to be the agenda. anna: we have the gold price for you. it fell down by point two of 1%. political uncertainty will keep up with pressure. we have to closes for you on japan and australia. this is what the markets look like at the end of the trading day. they are playing a great deal of catch up with wall street. the australian is down. oat's are upw the 13 on the bunds. a classic trade for the moment. in the meantime let's get to juliette juliette:. theresa may --

minister theresa may's conservatives -- the general election takes place in three weeks time. she will tell wealthy elderly voters that they will have to pay for their own care and promised further controls by doubling the levy charged to businesses for hiring migrant workers according to a person familiar with the plan. democratsthe liberal manifesto, tim. pledge to give the british people a second referendum after any brexit deal has been finalized. >> it is obvious when you think about it, someone is going to have the final say over the final brexit deal. it could be the politicians, or could be the people. i believe it must be the people. japan extended for a fifth straight quarter, thanks to the continued strength in exports. strungt time they together this many quarters of

growth was in 2006 and the pace of growth exceeded expectations. there is concern that spending may falter with stronger wage games -- gains needed to support household and allow retailers to rise -- raise prices. wasrts of the president involved in an alleged cover-up scheme. a brazilian newspaper has reported that a have been similar to the supreme court of a seeker according of him approving at -- a payment. the mastermind behind the impeachment of demo rousseff -- dilma rousseff. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. you can find more stories of the bloomberg at top . closing out in japan and australia. has not been a great session for asian equities as we continue to see investors shy away from

taking on risky assets. the big story has been about volatility. you saw a gauge and volatility 11%he nikkei 225 jumped by at one point during the session. we have seen the hang seng reverse some of its earlier losses down by one third of 1%. china off by my 41% and austria down by almost 1%. looking at stocks, tencent was a standout hitting a record high after it came through with stellar first-quarter numbers well above what the market was looking for. james hardy going the other way in sydney, full-year numbers were amiss sending the chip price down and we saw property developer stocks in hong kong fall on the latest housing prices showing that we have seen in terms of those property curbs set in has had an impact in -- on home prices. the key at the gdp p numbers, you can see reflected on the chart, this blue line here is

real gdp. it is going higher. in terms of what you're seeing on the gdp tracker. it could fall off so it has had five consecutive quarters of growth. can continue? a lot of economists saying we might need some intervention from corona and company. anna: thank you. we have the leisure of a special guest with us for the next half hour of the program, the ceo joining us here in london. great to have you on the program. we spent the last 48 hours talking about what is happening on capitol hill and what impact to that is having on markets. you see it in your boardroom and you tried to get on as business as usual. u.s. equity markets -- is that difficult, you want to keep your head above the data. x you have the market up in the s&p but put in perspective my you're still up 5% for the year. you're still up 17 at the last 12 months. i see it as a it of a speed

bump. the trump trade is a bit like, it is great for the newsroom and reality tv playing out in politics. and reality tv tends to have a shirt term -- short-term nature and terms of politics. investors will take this in their stride. the u.s. is more vulnerable because it has high pe. it is looking expensive when you compare to other parts of the world. i would expect more volatility. seoul we were at the conference. the global economies based in a stable china. european economy and rising u.s. corporate earnings. those three planks give a bit of a support. guest: this may be the first or that global gdp surprises on the upside. it has been a long time. so look at china. i said three years ago you would have a shanghai sabbatical and

we have come off it. i think you are getting a bit of a bounce from racing but other parts of asia, hong kong is that 2% growth, that is about the same as europe or the u.k. you need to look at, i look at countries, not regions. look at europe. you had the political themtainty, maybe cycle of in europe and the u.k. because the political situation is stable and investors like us, we like stability. anna: you talk about your big cash pile and wedgewood like to do with it and the stress at the capital. let's talk about the business. share buybacks are something you talked about in the past quite recently. how close are you to doing that, how does that fit in with your strategy on returning quite -- cash? guest: if you have five years ago the balance sheet was not the best. we are now one of the strongest around and we have this high-quality problem of having access capital.

single digit growth and a great balance sheet. excess capital, and we will do some modest tactical [inaudible] as well. we are going to pay down some debt, we have some expensive debt, 508 in the quarter coming in june. that's get rid of that. and helps weightings next year as well. notthen we have -- we have said exactly how we are going to do it but we will do it this year. and this is a problem we will be looking at. anna: what is the right level of capital? , the last capital figures we said were when hundred 89% of our sovereignty targets. you want to be between 150 and 180. do not want to be too much outside that range. manus: when you have done deals -- simplifying the

group. you have done the spanish deal and when you talk about the political risk receiving, is there a risk that you lose out some of the momentum of the recovery in europe, we will talk about china and a moment but europe, you sold the spanish business. looks wonder, europe better. crisis think it will be better and some medium-term prospects for the u.k. are great as well. we should -- we did not have a long term competitive advantage. if i can get a great price and bring the capital back, i will redeploy that and give it back to shareholders. we are ruthless and capital management and i will take it out of one country and put it in another. if the country says i cannot get mid single digit growth and double-digit growth [inaudible] where are you putting that capital to work, isn't poland, turkey, china? >> all of the above. i am a fan of turkey, it is not

a favor and some markets but i was there a few years ago. we are number two in that market and number two in poland. we like canada. we like asset management. we like china. juliet was doing the boards. withou have done a jv tencent. you are talking about i am worthless with capital. redeployment of capital to china , is that your journey, is that your destination, the redeployment of capital, what more what we see do in china? the businesses are huge consumers of capital. it is a -- it is about putting some resources. the deal with tencent is a joint venture. they bought the hong kong business as a base and they have huge distribution platforms. they have the biggest payment platform in the world.

they did 46 billion payments in one week. figures, the figures are extraordinary. want to redefine insurance in asia with a partner like that. insurance is expensive, it is old this tradition mechanisms, commissions are huge, margins are huge. marketls to me like a that is right for disruption. anna: thank you very much. steaming -- mark wilson is staying with us on the program. manus: we are building up to the elections in iran. one day to go before the iranians go to the pulse. this is president trump going with a few more sanctions overnight but stands by the current iranian deal. more to come. this is bloomberg. ♪

anna: welcome back.

this is bloomberg daybreak: europe. in new study suggests the u.k. exit bill may be as little as 5 billion pounds or no more than 30 billion pounds. the study is good news for prime minister theresa may as she releases her conservative party election manifesto today. manus: i caught up with the former bp ceo and he gave me his view on how britain should approach brexit negotiations. remain but now that we have decided to leave, we must make it really work. and it is important to say we have to find points of advantage between us and the rest of europe and we need to find that very quickly. for us i think as a nation, the has lived on its wits were very long part of its history, we are after all a resource for nation in the middle of the sea. we have lived on our wits, our ,rading wits, innovation wits

and our financial wits so we must make sure that the people involved in that, the great financial center we have here, the great science and technology centers, and the people associated with that feel comfortable and stay here and actually grew. anna: john brown speaking to manus. mark wilson is still with us. a country living on its wits. u.k.living on -- does the living on its wits, do they matter to business such as yours question mark a believe the world will go from locke trade deals to buy laterals. you have the u.s. saying they will not do block deals. means --what we are going to see, you see that more and more and the countries that

did the first buy laterals with china are doing well. u.k. now, the early we can start the better. there are restrictions but we still can get close. i spent a long time in asia. these have been a long time coming. the: are you lobbying for trade guild that is about regulation access? guest: there is too much in definitions. bits all about -- all a irrelevant. what is relevant is what is in the deal. the u.k., what the elections are going to do, if we leave -- believe all the polls it will give the prime minister a much wider mandate. it is going to sort out a lot of the domestic politics around it. if we guess we have to get into the detail of what the relationship is with europe. aim --we saw the u.s. do

many bilateral trade deals with china. what is an early win that shifts the negotiating dial with guards to the european deal? guest: you have had mr. trump said he would be delighted to do an early trade deal. we have to dole down the rhetoric and that is going to be a natural consequence of the elections around europe and the u.k.. manus: you think that threat, the background threat to create a mini singapore off the shores of europe, is that too far or has that got some validity? guest: the world has moved from in a block trade deals, digital world has to be more agile. the countries and governments that can become more agile will win and one of the things that we have to do here, we have to peel away some of these layers of bureaucracy, some border the

eu and ourselves in the u.k.. the regulation comes a sticky molasses that ties of business, let's simple five that and get a principal space system and do what is good for business. for the u.k. to thrive in a good way, it needs small business and big as us. we need to dole down the antibusiness rhetoric and saying it is business that improves the people in the u.k. anna: have you heard too much antibusiness rhetoric? guest: from many sectors, as well.ts, and media big business and small business, we need the city. solvency is about 4000 pages long.

ofrastructure, we do a lot infrastructure debt. i want to do more equity. government and the regulators as they are looking at two get their heads together and say with all our large assets we can put more on. in in aput 20 billion short space of time. assets,to get the right we can probably do that and we have to have the right capital treatment. the u.k. charges us three times more for the same infrastructure investment on capital than canada does. that is crazy. governmente current receptive when you talk about these ideas, we will replace solvency with something else, is government asking -- listening to the industry? guest: i think you find it is a coalition of the willing. havewe brexit you will not solvency in this kind of form and what happens after that,

let's wait and see. this is not just a problem for the u.k., this is a problem for europe as well. manus: there was a article this mine -- morning. you got a warning for the marketplace if the shakeup is inactive. it is a new accounting standard. the objective was to get a new accounting standard. it is an expensive answer to the question no one has asked. the objective, we are speaking of global. countries around asia will put in their own version of it. the investors do not really want it. the majority of insurance companies do not want it. regulators do not want it. anna: it will enable them to --pare guest: it will cost investors a

lot of money. it will be billions of pounds to increment it. consultants might make a lot of money but investors will not. it is no better or worse than the current system. if it is not achieving its objective, step act, have a look at that and make the right decision. anna: we're going to leave it there. as we go, when we spoke recently thetold me that the u.k. is eu whiplash capital of europe. guest: it is still the case and i am looking forward to the next government and acting the regulation i have spoken about. it has been delayed or it i would hope that is good for consumers and good for everyone. let's clean up this mess. anna: i record i am not sure we should be proud of. great joining us. manus: that is it for us. are set forts slightly lower opening.

we will continue to see suite level conversations. european equities set for a slightly lower opening. this is bloomberg. ♪

guy: good morning and welcome. this is the european open. i am guy johnson. i am in london. matt miller is in frankfurt. he is at the deutsche bank headquarters. what are we watching today, let's talk about it. robert mueller will lead a probe into the election of donald trump. s&p futures are higher. thatwill talk about