♪ anna: the lesser senate proposes a delay to corporate tax cuts until 2019, even as it matches the health rate at 20%. manus: trump arrives in vietnam. he joins a gathering of world in business leaders. the white house says he will not meet putin for now. anna: safeguarding the city. david davis says protecting london's financial district is britain's top priority in e.u. divorce talks. manus: china removes foreign ownership limits on banks and asset managers. we speak to j.p. morgan's asia ceo. ♪

anna: a warm welcome to "bloomberg daybreak: europe." manus: some cracking guests for you. we have j.p. morgan's asia ceo. opening up in china. anna: we will bring you an interview with the allianz ceo. we will talk about where you want to put your money. pimco be heart of the story. some breaking news. this is the hard luxury watchmaker, diamond maker. period, 974he

million euros. that is what we have. sales came in at 5.61. couple -- look at a couple of different stories. they are trying to grab a hold of their grand again. operating margin, 20.8 billion. -- 20.8%. when it comes to changes, they went through some serious change last year. the abolition of the chief executive officer position plaster, trying to rejuvenate the board. you had the head of watches, he left. he went to breitling. coo andjerome as emmanuel to be the head of watch this division. this is trying to have a hold of

this business, make sure it is fit for purpose going forward. let's talk about the steel sector. arcelormittal have numbers ahead billionates at $1.92 versus an estimate of $1.88 billion. interesting news lines coming through this morning. they are giving us guidance around whether -- where they are going to see growth. let's get back to the broader market story. we have been asking were volatility has been, and it returns to some extent yesterday. is not in thecks options market. the vix is up and running. is it time to put on the

protection had -- hat? we were up 24% at one juncture. it was much handwringing. it is the possible delay, the overseas incomes, the debate in the end come -- in the tax bill between the senate. on the move, bonds volatility on the move. this, the daily prophet says, is the time to put the plunge protection team to work. anna: the biggest vix surge since august. it is not just the u.s. story. radar, and wek will show you where we have been. moving things around in yesterday's session in japan. you can see we are down on the

risk radar on the overall picture for asia as we recover a little bit from the volatility in the asian session yesterday. it seems to be successful. services inncial the banking sector. we have the dollar on the move, holding onto those losses we saw in the last 24 hours. the tax story is at the center of things. trump has been talking about north korea and trade, but not much progress. manus: let's keep an eye on those bond markets in the meantime. we will talk about the house and ways and means committee. they trimmed the bills cost by providing more tax relief to companies. anna: among the changes, one would boost taxes on company stockpiles foreign earnings. jodi schneider is in hong kong for us. she has been analyzing the details.

by the houseed committee. if the senate republicans tax or puzzle, which also includes a corporate tax rate of 20%, how big a disappointment is the delay for investors? reporter: i think there is some disappointment that it would be 2019 in the senate version, and some concern that there are different versions of the bill out there. the house took the first step in its committee. the house tax writing committee passing that, and now it has to go to the full health, and the house is waiting to see what the senate does. ,ore concerning to investors whether they will be able to reconcile the bills. are they going to be able to do that quickly is the question. is what has spooked the markets, the possible delay

to the corporate tax side and the overseas money being taxed. congress seems to be bracing for over the state and local taxes, the estate taxes. you have so many vested interests. there are some pretty big fights to come. where do you think we should focus? reporter: there are big fights to come. code, not justax reducing rates, is a complicated thing. it hasn't been done since ronald reagan was president in 1986, and there is a reason for that. it is complicated and each change they make, there is a whole industry that springs up to fight it. it is very tight in terms of the vote. particularly in the senate. no democrats have said that they would vote for this. the only have a few votes to republicanrms of the caucus.

even though the health, and the house, even though they have the bigger margin, there are things like the state and local tax break that are concerning. eliminate that tax break for state and local tax breaks in the house. he don't want to do that, because there are some republicans were that is a begin. you can see what that one tax break, how complicated it can be. the -- see how anna: thank you very much for your time. jodi schneider joining us for the latest on the tax story. eye on that and keep talking about it. we see president xi jinping arriving in vietnam for the summit. manus: various lines coming at

australia. aymeric forest joins us now. good to see you this morning. we started today with volatility. real in the junk bond market, equity market, fx market. it shows you how important the tax deal is to carry through the bullish story on equities. aymeric: sure. increasing volatility has to be put into context. volatility context where people are trying to seek reduction against extremely high costs. between implied and realized has been quite wide.

it is a blip. we still believe an agreement will be achieved. therefore, volatility issues should remain low. anna: what is material for you only tax story in the united states? taxt about the corporate rate, whether we get a delay to a lower corporate tax rate, does that matter to the market? needic: we don't really bigger stimulus right now. the bigger the stimulus, the closer the next recession, i would say. it is something, but it has been moderated. i'm not sure that much has been priced in by the market yet. yes, we have seen a little bit of a blip, a relaxed -- a reaction, which is normal, but i

wouldn't expect something major. be corporate tax cut has to -- manus: aymeric forest stays with us. just showed those pictures of xi jinping. china removed for an ownership limits on bank an asset and it's me companies. anna: they are allowing overseas friends to take majority stakes in local security centers and insurers. --vietnam where haslinda let's head to the number haslinda is at the summit. you have the ceo with you. haslinda: what a big big moment for china. add -- forit will foreign banks operating in

china. our guest joining me right now. it is -- is it too early to pop champagne? >> it is consistent with what we have been talking about for some time. but we are seeing today is some announcements by the vice minister where he said the cap -- of 40% willt eventually have no limit. of doubles and the details, but if you look at medium long-term, it is consistent with what we have been seeing for some time. eventually, international banks will be able to operate in china freely. the trajectory looks very good. we have to see the details, but i am confident it is going to happen sooner. haslinda: what you make of the

timing? you were surprised. nicolas: i actually think this is a demonstration that this kind of dialogue and conversation -- and i don't know if it was related to the meetings they had, but clearly the u.s. administration has been interested for a long time to ,ake sure banks from the u.s. financial companies, insurance companies cannot -- and operate -- can operate freely in china. this is very good for china. it is good for international --that that want to have want to be in that market. haslinda: made an exit from your joint venture. eventually 100% or nothing. it is nothing right now. how do you position yourself now? nicolas: based on what we have

been hearing from the leaders of , so weeventually prepared our infrastructure for that and have been working for some time in that direction. our partner in the joint venture we had was a fantastic partner. we had a good experience. it is just they are a -- company. we want to operate a long business. we can bring out technology, everything we have around the world. billions of dollars in technology every year. we want to bring that to china. by being able to have our own business, we can do that more freely. haslinda: what will you do now? aymeric: we will continue with what we have been doing in our preparations, dialogues.

everything is in line with our plans. we have several plans. i welcome the news. we have to understand the details. we see where this takes us, but we continue working out to make sure we can have chinese companies and international players that want to participate in the chinese market. haslinda: for the commercial bank in spain, how do you think this will impact it? nicolas: it is good. the market is going very flat. the way it will work is this will allow more services. the onesplayers are that are going to do well. i don't think this is a negative for the local banks. the local banks in china are some of our most important clients. we are going to do more things with that. i think this is a win-win for everyone. haslinda: this has to be a huge

win for trump in terms of timing, given this is almost like a gift to wrap up his trip to asia. nicolas: i think it is good for the u.s. it is good for u.s. firms that want to operate in china. most important like, i think it is positive for china. haslinda: is this the new china that we are looking at? is this xi jinping showing the world his leadership is different from his professors? that's from his predecessors? nicolas: i see a continuation of the past. trajectory. owna is doing it at its pace, but the trajectory has always been consistent. from our point of view, it may take six months, nine months, one year more. we have been in china since 1921. a few more years is not going to

make a difference. we are looking at the next 10, 20, 30 years. having seen china change, where is the risk in doing business in china now reduced? nicolas: if we have more international firms operating in china, i think the risk of operating would be better understood, and therefore encourage more investment in the country. haslinda: thank you for your insight today. nicolas: thank you. haslinda: the latest news out of china. back to you. manus: thank you very much, haslinda. 1921.e been there since that is what you call strategic planning. anna: let's get a bloomberg business flash. juliette saly is standing by with that. allianz has said a series of hurricanes and

earthquakes mark stop it from reaching its profit goal for 2017 and from buying back more shares. that incomes declined in the quarter. the insurer said it would start another purchase to buy as much as 2 billion euros of stock in the first half of next year as a buyback is drawing to a close. the cfo joins us for an exclusive interview at 7:00 a yet -- 70 clock a.m. u.k. time. investors raise concerns -- the cfo will assume responsibility for the european division. walt disney has said it is making another trilogy of "star wars" movies. the plans are welcome is not only to fans, but to disney

investors, who have enjoyed the , and to theater chains. the announcement came as the world's largest entertainment company reported quarterly earnings. the u.s. justice department has torted a distribution victims of bernard madoff's ponzi scheme. the victim fund will return more than $770 million to more than 24,000 victims worldwide, the first in a series of distributions. the payouts will become the largest in the history of the justice department's victim, session program. that is your bloomberg business flash. haslinda: david davis said the u.k. -- manus: david davis said u.k. --

they are stepping up operations to move lance to other countries. anna: let's turn our attention to u.k. assets. how much exposure to the u.k. do you have at the moment? -- do you see that a bombing see that evolving? -- aymeric: from a technical point of view, on the equity side, we prefer others. manus: we are going to tune into the president of the united states and vietnam, just beginning his speech. employment is at its lowest level in 17 years. the stock market is at an all-time high, and the whole world is lifted by america's

renewal. everywhere i have traveled on this journey, i have had the pleasure of sharing the good news from america. even more, i have had the honor of sharing our vision for a free and open into pacific, a place where sovereign and independent nations with diverse cultures in many different dreams can thrive side-by-side and in freedom and peace. thrilled to be here pec, because this organization was founded to help achieve that very purpose. member stands as a proud of the community of nations who make a home on the pacific. we have been an active partner

in this region since we first one independence ourselves. 1784, the first american ship sailed to china from the newly independent united states. it went loaded with goods to sell in asia, and it came back full of porcelain and tea. our first president, george washington himself, owned a set .f tableware from that ship in 1804, thomas jefferson sent the explorers lewis and clark on an expedition to our pacific coast. they were the first of the millions of americans who ventured west to live out america's manifest destiny across our best continent. -- our vast continent. congress approved the first full-time pacific development of

an american warship. that initial label present soon grew into a squadron, then a fleet to guarantee freedom of navigation for the growing number of ships, braving the high seas to reach markets in the philippines, singapore, and in india. relationshipegan a with the kingdom of thailand, and 15 years later, our two ourtries signed a treaty, first within asian nation. -- with an asian nation. anna: we seem to have lost the picture there coming to us from vietnam. president trump they're talking about his vision for free and indo pacific, harking back to the 70 hundreds trade relationship. the pictures that. we will be friends, partners,

and allies for a long time to come. region, nonds in the one has been more delighted in america to witness to my to help, and to share in the ordinary progress you have made -- in the extraordinary progress you have made in the last half-century. what the countries and economies represented here today have built in this part of the world is nothing short of miraculous. the story of this region in recent decades is the story of what is possible when people take ownership of their future. if you would have imagined just a generation ago that leaders of these nations would come deepen our friendships, expand partnerships, and celebrate the

amazing achievements of our people. this city was once home to an american military base in a country where many americans and vietnamese lost their lives in a .ery bloody war today, we are no longer enemies. we are friends. shipsity is bustling with from all around the world. marvels, like the bridge my welcome the millions who come to visit the stunning beaches, shining lights, and into charms. in the early 1990's, nearly half of vietnam survived on just a few dollars a day, and one in four did not have any electricity. opening the emmys --nomy is one of the

vietnamese economy is one of the fastest-growing economies on earth. it is -- it has already many times over in the vietnamese students rank among the best students in the world. [applause] and that is very impressive. this is the same story of incredible transformation that we have seen across the region. decades, haveor been building domestic and democratic institutions to govern their best -- there more than routine thousand islands. -- they're are more than 13,000 islands. the have listed insults from poverty to become one of the fastest-growing nations -- they have listed themselves from

poverty to become one of the fastest-growing nations. emerged as aes has nation of strong and about families. -- and devout families. the world economic forum has rained the philippines first among asian countries in closing the gender gap and embracing women leaders in business and in politics. [applause] the kingdom of thailand has become an upper middle income country in less than a generation. bangkokestic capital of is now the most visited city on earth. and that is very impressive. not too many people here from thailand. [applause] malaysia has rapidly developed

through recent decades, and it is now ranked as one of the best places in the world to do business. in singapore, citizens born to 42earance who survived -- parents who survived on five dollars a day are now among the highest earners in the world, a transformation made possible by of honest governance and the rule of law. [applause] fun -- and his son is doing an amazing job. as a recently observed in south korea, the people of the republic took a poor country ravaged by war and turned it into one of the wealthiest -- thecies honored

wealthiest democracies on earth. it was great spending time with president moon. everyone knows of china's impressive achievements over the past several decades. during this period, and it was a period of great market reforms, large parts of china experienced rapid economic growth, jobs boomed, and more than 800 million citizens rosetta part of -- out of poverty. i just left china this morning. i had a really productive meeting and a wonderful time with our gracious host, president xi. stop of on my first this trip, in japan, we see a dynamic democracy in a land of

industrial, technological, and cultural wonders. in fewer than 60 years, that nation has produced 24 noble prize winners for achievements in physics, chemistry, medicine, literature, and the promotion of peace. [applause] president abe and i agree on so much. in the broader region, countries outside of apec are making great strides in this new chapter for the indo pacific. india is celebrating the 70th anniversary of its independence. it is a sovereign democracy i'm a as well as, think of this, over one billion people. it is the largest democracy in the world.

since india opened its economy -- [applause] -- it has achieved astounding ofwth and a new world opportunity for expanding middle-class, and the prime minister has been working to bring that country and its people together as one, and he is working at it very, very successfully indeed. see in more and more places throughout this region, citizens of sovereign and independent nations have taken greater control of their destinies and unlocked the potential of their people. they pursued vision of justice, promoted private property, the rule of law, and embraced systems that value hard work and individual enterprise.

cities,lt businesses, entire countries from the ground up. many of you in this room have taken part in these great, uplifting national projects of building. they have been your projects from inception to completion, from dreams to reality's. with your help, this entire region has emerged, and it is still emerging as a beautiful constellation of nations, each , and eachight star one of people, a culture, a way of life, and home. those of you who have lived through these transformations understand the value of what you have achieved. you also understand that your , and youour legacy

must always protect it. the process of your economic development, you saw commerce and trade with other nations, and forged or ships based on mutual respect and directed -- and are acted mutual gain. partnership offer with america to strengthen the bonds between all of the nations of the indo pacific, and together to promote our prosperity and sigourney -- and security. we seek robust trade relationships rooted in the principles of fairness and reciprocity. when the united states enters into a trading relationship with other countries or other peoples, we will expect that our

partners will faithfully follow the rules, just like we do. we expect that markets will be open to an equal degree on both sides, and that private industry, not government planners, will direct investment. unfortunately, for too long, and did too many places, the opposite has happened. for many years, the united states systematically opened our economy with few conditions. we lowered or ended tariffs. reduced trade barriers, and allowed foreign goods to flow freely into our country, but while we lowered market barriers, other countries didn't open their markets to us. funny.

they must have been one of the beneficiaries. what country do you come from, sir? countries were embraced by the world trade organization, even if they did not abide by its stated principles. simply put, we have not been treated fairly by the world trade organization. organizations like the wto can only function properly when all members follow the rules and respect the sovereign rights of every member. we cannot achieve open markets --sure --ot insure n ensure fair market access. the united states promoted private enterprise, innovation, and industry. other countries used government run industrial planning and state owned enterprises. principles onwto

protecting intellectual property and ensuring fair and equal market access. they engaged in product to dumping, subsidized goods, currency manipulation, and predatory industrial policies. the rules to gain advantage over those who followed the rules, causing enormous distortions in commerce. foundationsing the of international trade itself. such practices, along with our collective failure to respond to them, hurt many people in our country and also in other countries. industriesries, and were stripped out of the united states and out of many countries in addition. opportunities from mutually

beneficial investments were lost, because people could not trust the system. we can no longer tolerate these chronic trade abuses, and we will not tolerate them. despite years of broken promises, we were told that someday soon everyone would behave fairly and responsibly. and throughoutca the indo pacific have waited for that day to come, but it never have, and that is why i am here today. to speak frankly about our challenges and work toward a writer future -- a brighter future for all of us. i recently had an excellent chip to china -- excellent trip to china i spoke openly with the president about china's unfair trade practices and the enormous trade deficits they have

produced with the united states. expect -- i expressed desire to work with china to achieve a relationship that is a truly fair and equal basis. the current trade imbalance is not acceptable. i do not blame china or any other country, of which there are many, for taking advantage of the united states on trade. if their representatives are able to get away with it, they are just doing their jobs. i wish previous administrations in my country saw what was happening and did something about it. they did not, but i will. day forward, we will compete on a fair and equal basis.

we are not going to let the united states be taken advantage of any more. i am always going to put america first, the same way that i expect all of you in this room to put your country's first. [applause] the united states is prepared to work with each of the leaders in this room today to achieve mutual beneficial commerce that is in the interest of both your countries and mine. that is the message i am here to deliver. i will make bilateral trade agreements with any indo pacific nation that wants to be our partner and will abide by the principles of fair and reciprocal trade. ist we will no longer do enter into large agreements that

tie our hands, surrender our meaningful, and make enforcement impossible. instead, we will deal on a basis of mutual respect and mutual benefit. we will respect your independence and sovereignty. we want you to be strong, prosperous, and self-reliant, rooted in your history, and branching out toward the future. that is how we will thrive and grow together. in partnerships of real and lasting value. this, and i call it the indo pacific dream, if it is going to be realized, we must that all playure by the rules, which they do not right now. those who do will be our closest economic partners. certaino do not and be

can bee united states -- certain that the united states will no longer turn a blind eye to violations, cheating or economic aggression. those days are over. tolerate thenger audacious theft of intellectual property. we will confront the destructive practices of forcing businesses to surrender their technology to the state, and forcing them into joint ventures in exchange for market access. we will address the massive subsidizing that put private competitors out of business, happening all the time. aswill not remain silent american companies are targeted by state affiliated actors for economic gain, whether through cyberattacks, corporate espionage, or other

anti-competitive practices. all nations toge speak out loudly when the principles of fairness and reciprocity are violated. we know it is in america's interest to have partners route this region that are thriving, prosperous, and dependent on no one. we will not make decisions for the purpose of power or patronage. we will never ask our partners to surrender their sovereignty, intellectual property, or to limit contracts to state owned suppliers. we will find opportunities for a private sector to work with yours and to create jobs and wealth for us all. we seek strong partners, not weak partners. we seek strong neighbors, not weak neighbors. friendship,e seek

.nd we don't dream of damnation 4 -- dream of domination. banke calling on the world and the asian development bank to direct their efforts toward high-quality infrastructure investment that promotes economic growth. the united states will do its part. a are committed to reforming finance institution to better incentivize investing in your economies and provide strong alternatives to straight directed initiatives that come with many strings attached. the united states has been reminded time and time again in recent years that economic security is not merely related to national security. economic security is national security. .t is vital

[applause] -- to our national strength. we also know we will not have lasting prosperity if we do not confront great threats to , facing, sovereignty our world today. earlier this week, i addressed the national assembly and south korea and urged every responsible nation to stand united in declaring that every single step the north korean regime takes toward more weapons is a step it takes them to greater and greater danger. the future of this region and its beautiful people must not be held hostage to a dictator's twisted fantasies of violent conquest and nuclear blackmail.

in addition, we must uphold principles that have benefited all of us, like respect for the rule of law. [applause] individual rights, and freedom of navigation and overflights, including open shipping lanes. principles and these principles create stability and build trust, security, and prosperity among like-minded nations. we must also deal decisively with other threats to our security in the future of our children. cartels, humanl smuggling, drugs, corruption, cybercrime, and territorial expansion. as i have said many times before, all civilized people

must come together to drive out terrorism and extremists from our society. stripping them of funding, territory, and ideological support. we must stop radical islamic --rorism, so let us together so let us work together for a prosperous and free indo pacific. i am confident that together every problem we have spoken about today can be solved, and every challenge we face can be overcome. if we succeed in this effort, seize the opportunities before us, and ground are partnerships firmly in the interests of our own people, then together we will achieve everything we dream for our nations and our children. blessed with a world of strong, sovereign, and independent nations, thriving in

peace and commerce. there will be places where we can build our homes and where families, businesses, and people can flourish and grow. if we do this, we will look at the globe half a century from at the we will marvel beautiful constellation of nations, each different, each unique, and each shining brightly and proudly throughout this region of the world. and just as when we look at the stars in the night sky, the distance of time will make most of the challenges we have and that we spoke of today seem very small. , whatill not seem small is not small will be the big choices all of our nations will have to make to keep their stars

glowing very brightly. like any nation that has won independence and sovereignty, we understand we have not been so precious as our birthright, our treasured independence, and our freedom. that knowledge has guided us throughout american history. it has inspired us to sacrifice and innovate, and it is why today hundreds of years after our victory in the american revolution, we still remember the words of an american founder and our second president of the united states, john adams. as an old man just before his death, this great patriot was asked to offer his thoughts on the 50th anniversary of glorious american freedom. he replied with the words

"independence forever." it is a sentiment that burns in the heart of every patriot and every nation. our hosts hearing vietnam have known this sentiment not just for 200 years, but for nearly 2000 years. [applause] it was around 4080 when -- 40 a.d went to vietnamese sisters first awakened the people of this land. it was then that for the first time the people of vietnam stood for your independence and your pride. today, the patriots and heroes -- [applause] histories, all the answers to the great -- through the great questions of our

history and time. they remind us of who we are and what we are called to do. together, we have it in our toer to list our people -- lift our people and world to new heights that have never been attained. but eschews choose the future of patriotism, prosperity, and choose thet us future of patriotism, prosperity . let us choose a free and open indo pacific, finally, let us never forget the world has many dreams come and many roads. in all of the world, there is no place like home, and so for family, country, freedom, history, and the glory of god,

protect your home, defend your todayand love your home and for all time. thank you, god bless you. region,s the pacific and god bless the united states of america. thank you very much. think you. manus: that was the president of the united states, a standing ovation for him there in vietnam. he is talking about freedom. if yousef praise in the first praise in thesef first part, then the audacious theft of intellectual party. talking about we have not been treated fairly by the wto. he talks about product dumping, currency manipulation, jobs in factories leaving the united states of america. he didn't expressly talk about

china, but he talked about the region. anna: he talked about china in some places, but he didn't mention china in specific places. chinard overnight that has been taking action to open up its financial services industry. we are getting comments coming through from big global banking players. moving foreign ownership limits on its banks, asset management companies. ubs says they continue to work towards the curse stakes in china ventures. j.p. morgan says it welcomes china financial sector liberalization. we heard from the asia ceo earlier. you can pick up all of the comments that trump made. let's get to haslinda. she has been listening into the

summit. good to see you this morning. , butarted out with praise he went on to say that he blames previous administrations and he is not going to stand for it. perception,your this is about fair access. haslinda: it is true, and in a way, he stayed with the message of reciprocity. -- it is a message you're sending the asia-pacific region, only he is calling it termndo pacific dream, a he has used, but nobody else. what is important is he said the u.s. remains engaged with the region. has taken office, there has been doubt about u.s. engagement in this part of the world.

tppipped through from the .- he withdrew from the tpp he was after a bilateral trade agreement for reasons he mentioned in his speech. this is an indication he remains committed. he says america stands as a proud member of the nations in the pacific. the u.s. wants to strengthen the bond with all of the members of the indo pacific. a strong message, and it is a message the region needed to hear. leaders in the lead up to this speech by trump, all of them were saying they are waiting to see what his commitment would be. anna: giving us the positive message, but also with that hard challenge, the things they won't tolerate in the united states. thank you very much for joining us from vietnam.

is still with us. how do you respond to what you heard? there were a lot of well trodden themes. he continues to blame his predecessors, not china. it is a device used yesterday. a lot of things the united states want tolerate. has this shifted the game at all? aymeric: it is part of his agenda. asia is very important. 40% of global trade is done in this region. it is important as part of global markets. we focus a lot on asia. any comment that would potentially affect global trade is important. we believe that is where global growth comes from. we have seen dramatic changes in the way china operates.

technology. nowadays, 40% of emerging-market equity, msci index is composed of new technology. that willgion continue to enjoy growth, and it is important to find a good compromise. manus: thank is a much for being patient. trump trumped the agenda this money. he is looking for bilateral deals which are fair. anna: mutually beneficial commerce and bilateral, the order of the day. we will speak exclusively to the allianz cfo. on the get his thoughts opening up of the financial services sector in china. we are near all-time highs in

the u.s. stock market. european market open will be closer for us when we come back. we will get you those futures. u.s. equity futures modestly lower. this is bloomberg. ♪

♪ trump in vietnam carried the president talks security and fair trade at the apec summit. but he scrapped a former meeting with putin. not going to are let the united states be taken advantage of any more. i am always going to put america first, the same way i expect all of you in this room to put your countries first. anna: timing a tax cut. the u.s. senate with a delay to tax cuts -- corporate tax cut still 2019. david brexit secretary

davis says protecting london's financial district is britain's top priority in eu divorce talks. foreignina removes ownership limits on its banks and asset managing -- management. manus: welcome to bloomberg daybreak, europe. our flagship morning show in london. i'm manus cranny. anna: i'm anna edwards. 7:00 in london. an interesting session in the asian market, down .3% on the asian equity market. where does that leave us in the european open? manus: a little softer. will there be a delay in corporate tax? asia beinggains in trimmed back. london set for a softer opening. david davis seems to suddenly have gone about the city as being top of the agenda. they barely mentioned the city

or the deal. european equities a little lower. that is the personification on the risk radar. up .9%.le softer, still nikkei, the topics, all those markets, 10-year highs for the msci asia-pacific. seen thehave volatility story picking up in the united states has a result of the tax story. the vix highest since august, but the nikkei surging the highest since april because of the derivative story, partly, which is very much the japanese part of things. interesting to see how all this talk about china opening up its banking industry -- some comments from j.p. morgan reacting to that.

doesn't seem to have excited the markets too much yet. futures point down .1 percent on major indices. maybe that is a longer burn story. heard from the asia ceo for j.p. morgan in the last hour of the program. manus: ubs and jpmorgan making positive comments so far. 10 year government bond yields 2.36%. something that drives a lot of these markets. about the european bond market open. german bunds, we are a little lower in terms of those bond markets. you saw some movement in the u.s. bond markets late yesterday evening. u.s. bonds lower by about 13 pips. trading 157.42 am a down 16 pips. anna: we need to talk about allianz. they said the series of earthquakes will

not stop them from reaching their profit goal for 2017 and buying back more shares. it expects its full-year operating profit in the upper half of the target range. manus: it said in july it expects to reach the upper end of the range. aining us from munich is exclusive interview with dieter wemmer. the guidance will be taken warmly by the market. talk us through the strength of this quarter and take me forward in terms of the biggest risks to the numbers. good morning, manus. thank you for the question. with 2.5 billion operating we are almost half a billion lower than in previous quarters and that is all explained by the hurricanes. i think our underlying performance continues to be very strong.

pimcoa positive -- from continues, 32 billion net inflows. first 10ok at the months of pimco, we have billion crossed the $25 net inflows. that is a fantastic recovery of our pimco performance and the team is really doing great. i think the outlook for the rest light year is the usual -- volatility of the financial markets you just touched on and i think the hurricane season is not yet over, but i think we are overall very confident that we can also weather the rest of the year. anna: good morning to you, what about return of cash to shareholders? you have made comments around

the share buyback. what gives you the visibility to make that commitment today? well, we had announced in the beginning of the year a 3 billion euros share buyback. we will completed in the next few weeks. we have announced yesterday night another 2 billion euro on top, which we will start right after. we have a very strong solvency , 227%.o our management ratio is above our upper limit. if you want to translate this into s&p terminology, we are in aaa area. the biggest news stories we have comes from china this morning. the chinese have -- they are removing foreign ownership limits for lenders and fund firms. this is a big bang moment for

china and their market. how do you look at this news? is this an opportunity you might consider important for allianz? even with the good news of this morning, we have considered china already has a very interesting area for our asset managers to expand. the asian expansion is clearly high on our strategic list with china on top and i think as the pimco products have already now a worldwide customer base and we see also in iran's global -- allianz global investors, a strong presence in asia, we are prepared to take part in this opportunity. manus: obviously, jvs were the way forward for the likes of

ubs. they said this is an interesting moment and they continue to work towards a bigger stake in china venture. will you be sticking -- seeking deals? is that what goes through your mind is a board member when you read this new slow? -- news flow? dieter: let's first clarify the details and then we will fine-tune our ambition and next steps. anna: can i ask about your view of the markets at this point? we saw a selloff of the stock portfolio but munich re increasing their share of equities from 6% to 7%. how does allianz look at the stock market? we are not far from all-time highs in the u.s. market and multi-year highs in global equities. how do you look at stock market at the moment? dieter: we have built up over the whole year our equity quota. to sicu's it.ns

we look for opportunities in the market. we manage the portfolio quite carefully and in particular, use programs todged move the portfolio along with the market. numbersou mentioned the -- you talked about the thiscane numbers impacting quarter. what we want to understand is the ramifications of that 529 million euros in terms of pricing for allianz and more broadly, for the industry. capacitors have been battered by the hurricane. -- ing for the industry terms of prices for us. first, i look at what does it mean for allianz? the 500 29 million is our net seatr, but we have only

-- ceded small losses. less than 100 million euros come a which is really small. if reinsurers come to us and ask for more money, we will be hesitant to agree to this. more --n i ask a little >> the main impact. anna: can i ask a little more about pimco? said atc recovery, you pimco. does it concern you that we once again see the markets and commentators very focused on one fund in particular. on dan iversen's income fund? does it concern you there is a lot of media attention on that fund rather than across portfolio? dieter: it is true. it is clearly a winning fund and a top-performing fund and in the

active space, i think we see much more the winner takes it all situation. therefore, the income fund is at the moment in this position. are we concerned about it? i think we will continue to deliver great performance for our customers and have many other strategies which are doing also well. it is not that all the inflows are the income fund. the income fund by itself has inflows, if you say strategiesurrounding , you could say less than half, more than $60 billion on inflows so far for this year attached to other strategies and that shows that pimco is doing a great job also in other income strategies. manus: since we are

pimco-focused in this interview, we have the flatter yield curve in 10 years. is a bondsiness market. how much of a conversation are you having with dan iversen and your cohorts at pimco in regards to an inflection point in the bond markets? what is the flap -- what does the flattest yield curve in 10 years me to you? dieter: that is true. that makes the job or the markets but offer the same challenge to everybody. pimco can continue to outperform the market that is about generating alpha. that is what you are being paid for in active management and i think even when it is getting harder, we will see could numbers to continue. anna: thank you very much for

your time. dieter wemmer, the cfo of allianz to talk about the broader investment market. breaking news coming through. ipo,vore that canceled its offers all sorts of things in the catering industry -- they ipo settingr london per share.0 juliette: u.s. president donald trump has arrived in vietnam and delivered a speech to the apec summit. it ranged from the region's security to global trade. earlier, the white house had said trump would not formally putin, citingimir his schedule. there had been speculation the presidents would hold talks today. to let thet going

united states be taken advantage of anymore. going to put america first, the same way that i expect all of you in this room to put your country's first. juliette: the u.s. house ways and means community -- committee has approved revisions to the tax cut plan. toprovides more tax relief owners of partnerships, limited liability companies and others. other changes boost taxes on foreign earnings, allow the estate tax to remain in effect a year longer than house leaders originally proposed, and reduce break based onx spending. leavearabia has announced of lebanon. the guidance was due to the "situation in lebanon" without giving details. it comes they -- five days after ae president resigned in

speech to saudi arabia and fuels fears of a confrontation with iran in a country long known for being a battleground for proxy wars. croatia also called on its national -- global news 24 hours a day, powered by more than 2600 journalists and analysts in more .han 120 countries you can find more stories on the bloomberg on top . selloff in asian markets continued today. the regional index off by about one third of 1%. day for regional stocks we have had since late september. the nikkei closing lower by .8%. a bit of a turnaround in chinese stocks as we heard the news on the relaxation of the foreign ownership cap. if we have a look at stocks we are watching, we are focused on the hong kong insurance banking players. this news filtered late in asian trading. bridgestone in japan, one of the worst performance in the region after it missed estimates and

lowered its full-year outlook. 3.4% lower.ng by a price of 4.49 aussie. e stillhe ipo of bakkavor on and it will sell shares at 180 pence a share. manus: coming up, could brexit be delayed? eu ideas being floated by officials. at 9:30 this morning, we speak with nicolas petrovic, the euro star ceo. this is bloomberg. ♪

♪ this is bloomberg

daybreak, europe. in berlin, it is 8:19 in the morning. euro versus dollar pretty unmoved from the previous closed. . we are getting numbers from the state bank of india, a bit of a mess. -- if you wantme to track the results, though on your bloomberg on your mobile. falling as much as 1.3%. the estimate was for 26.3 so a considerable miss in the numbers. the state bank of india had a second quarter gain of 7.2 billion rupees and their interest income in the second 548.5. those are the topline numbers from the sbi.

anna: we got news of the recapitalization plan in october that really moved the markets in india. we are getting live pictures coming through from the apec summit in vietnam. xi jinping waiting to make comments at the meeting. we have already heard from president trump this morning. manus: a quick snapshot on the markets. we are waiting for mr. xi to speak after donald trump talked about the audacious theft of intellectual property. the bottom line is this. -- how much of a tax break will you get in the usa? where you get a delay on the corporate tax deal? that is drifting into the asian sector. hero stoxx 50 down 1/8 of 1%. keep an eye on allianz. dieter was bullish on the pimco story. taskutures, that is the

risk. anna: setting off positives from the news china is opening up its industry to outside investment. officials have started questioning whether the u.k. could stay a member beyond march 12 night -- 2019 of the eu. manus: the idea has been floated as a smoother alternative to a transition deal. germany's council of economic experts backed the idea wednesday, but the proposal would be tough to sell in the u.k.. winters,rofessor alan economics from the university of sussex and he is here. what do you make of the proposition that brexit could be delayed? 2019?ld be pushed past a unanimous approval would be

needed. i think it is a sensible suggestion from a technical point of view. i think it is the only way we could get a transition that replicated the status quo. the difficulties are, in time, political. it is not difficult in europe. most anything they would agree on the transition would require that level of agreement. the difficulty is persuading part of the british body politic that that is the direction they want to go in. if we want a smooth transition, this really is something to explore. anna: something to explore. we will see. here atning, we spoke bloomberg to a ceo who said this is more of a broad conversation around brexit. he said it was inconceivable to not have a brexit deal on trade. is it inconceivable? alan: not if you are a miserable

soul, like i am. it is possible to imagine we will crash out if we don't get the politics sorted out. it will be painful economically. there is no point pretending it is not something we or the europeans want to end up, but you can't just sit back and say it cannot happen, therefore don't worry. i'm not sure that is what he was saying, but the truth is we have to concentrate even to avoid something as bad as that. bad asavoid something as that. professor winters, how long in european is a pragmatic and reasonable transition period? what do we need? what does the u.k. economy need in terms of a transition period? to emerge fromt this process with a deep and comprehensive trade agreement, we really would be looking at

beyondimum two years 2019, probably three years. that would be a scramble, but we are starting from a position of great convergence. will oneal political both sides, my guess is three years would allow us to sew up almost every detail. and we hear talk of around two from the government. alan, we have heard a lot about norway on the prime minister saying she doesn't want a model yourl, but you and colleagues have been suggesting that the eu-ukraine arrangement might offer a model. tell us briefly what it offers and how much it costs ukraine. it doesn't cost ukraine a great deal in terms of money or anything like that. what it requires ukraine to do economy, reform its politics and society, even,

to become more european. the european union. the interesting thing about ukraine is it is a model that gives the ukrainians quite a lot of access to the single market, being able to sell almost free of friction within the european free but without being mobility of labor. the big difference between the ukraine and the u.k. is that ukraine is in some sense on the way in. the european union is asking its to converge ever closer and in a sense, the ukrainians don't do it, they can just freeze the extent to which things are improving in terms of their access to the european union. the united kingdom, we are going in the opposite direction. pithy stuff weur have got going at the moment and that is more difficult for the political process to control. much.thank you very

trade very topical on the other side of the world. take so much. alan winters at the university of sussex. xi jinping speaking at the apec summit. let's listen. in pursuing economic globalization, we should make it , morepen, more inclusive andnced, more equitable more beneficial to all. we are seeing a profound change in the system of global economic government. the evolving global economic environment demands more from the system of global economic governors. we should uphold multilateralism, pursue shared through consultation and

collaboration, forge closer partnerships and build a community with a shared future for mankind. this, i believe, is what we should do in conducting global economic governance in a new era. ladies and gentlemen, dear friends, faced with profound changes in the global economy, should we, the asia-pacific economy, lead reform and innovation or should we hesitate and proceed? should we steer economic globalization, or should we dither and stall in the face of challenge? should we jointly advance regional cooperation, or should we go our separate ways? here is my answer. the trendvance with

of times. live up to our responsibility and work together to deliver a bright future for development and prosperity for the asia-pacific. first, we must foster an open economy that benefits all. openness brings progress while self seclusion leaves one behind. we, the asia-pacific economies, know this too well from our own development experience. we should put in place a regional corporation framework that ensures consultation among equals, participation and shared benefits. we should build an open asia-pacific economy. make economic globalization more open, inclusive and balanced so that it can benefit different countries and people of

different social groups. we should proactively adapt to the evolving international division of labor and actively reshape the global value chain, so as to upgrade our economies and build up new strength. we should support the multilateral trading regime and regional -- to allow members to benefit more from international trade and investment. [applause] the building of a free trade area of the asian pacific is a long cherished dream of the business community in our region. it was in response to the call of the business community that aipac leaders initiated