♪ anna: good morning. manus: this is "bloomberg daybreak: europe." these are today's top stories. anna: trump's davos debut. ceos, but george soros says has is meant -- says his administration is a danger to the world. officialsevy of u.s. send conflicting messages on the greenback. anna: more time for brexit? governments are said to be open for a transition period beyond 2020. ♪

anna: a very good morning, everybody. this is "bloomberg daybreak: europe." we have been in davos all week. we build with a crescendo towards donald trump speaking at the event. haslinda amin is there. haslinda: good morning. the trump day.be he is expected to deliver a keynote address at 2:00 p.m. local time. what is the message? nobody knows. it is likely a push for america first. about one year ago when he came to power, a lot of people were saying it could be a doomsday scenario, weighing on global growth. a year on, lots of optimism, and we are feeling it here.

plenty to talk about today. final day in davos. shortly, i will be talking to different guests. we will also bring you an exclusive interview with francois bill o'reilly -- with francois velleroy. villeroy.ancois let's have a look at where we are in the markets. this is the asian equities session, down .2%, losing a bit of ground. the australian market is closed. australia day there appeared the australian dollar getting a little bit of a boost in celebration. united states, little changed at the end of their session. there is a lot to say about the dollar.

.3%, atndex down around least five officials from the trump administration weighing in with their thoughts on either but the dollar should look like or what others have been saying around the dollar. a cacophony of commentary is what it has been called. what president trump himself had to say did hold the dollar for a bit, but we are back to it today, down .3%. the euro up .3%. we digest the response from the ecb. manus: it is all the marks of verbal fx wars, if not the reality. this time last year, donald trump said it is killing us some of the dollar, that is. if you are in the fx market, you can look at our store this morning. -- look at our story this mine. it is all about fibonacci. what i am looking at his

dollar-yen. -- what i'm looking at is dollar-yen. traders charging more for protection on the downside of yen, asar against the they are against the euro, as they are against the pound. you are paying extra premium to protect yourself on the downside in terms of dollar-yen. mario draghi finds it. the treasury secretary tanks that, and then trump tried to walk it back from the edge in terms of where the dollar goes. the panorama from the dollar, it is certainly tamer at the moment. the bank of japan shifted the language of the start of the week, and then mario draghi went a little bit extra yesterday, talking about the foreign exchange movement as well as volatility. perhaps not as hard and heavy as the market would have liked. juliette saly standing by. she has your first word news. u.s. president donald

trump will support a path to citizenship for as many as 1.8 million undocumented immigrants brought into america. white house officials say he also wants congress to provide a $25 billion trust fund to pay for a southern border while and enhance security at ports of entry come as well as improvements along the u.s.-canada border. he will also seek additional funds of for immigration enforcement personnel and immigration judges. soros says thee trump administration is a danger to the world. he said the u.s. president is a risking war with north korea and must accept it as a nuclear power and cooperated and negotiate --" break and negotiate. as a nuclear power" break and negotiate. consider the trump administration a danger to the

world. purelyd it as a temporary phenomenon that will disappear in 2020 or even sooner. many e.u.in europe, governments are wishing -- are willing to push the brexit transition beyond the 2020 deadline. according to three people familiar with the talks, nations including hungary, sweden, and ireland are open to a more flexible approach. privately, many e.u. officials believe it will be prolonged if it becomes obvious to the u.k. government that the trade deal will be difficult to reach the next three years. in china, profit growth and industrial firms moderated for a third month after factory inflation decelerated to the weakest pace in more than a year. industrial profits rose 10 point percent last month from a year earlier -- growth 10.8% last month from a year earlier.

producer price index fell for a second month in december. --global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . final trading day of the week. it looks like asian markets are set for a seventh consecutive weekly gain. we have the nikkei closing up a session with a little bit lower. they are off .2%. hong kong hang seng coming up after the selloff yesterday, up 1.4%. the cost be -- the kospi is a little bit weaker. australia is closed for australia day. in terms of stocks we have been watching in the region, a big pickup in south korean retailers. internet initiative japan, the

company rising in the session. this is after unveiling a plan for a digital currency venture. we had high-end a motors coming through yesterday with corporate earnings yesterday, a miss. manus: thank you very much. it is the final day at the world .conomic forum in davos the future of banking and financial services, less than seven hours ago until donald trump makes his speech. that will be be focus of the day. haslinda amin is standby. haslinda: you said it. financial services also he a look of the economy, so much optimism here. let's get some perspective from our guest.

much optimism. is it because people feel like we are at the tail end of the financial crisis? >> it certainly does. we had a financial services gathering of many of the governors, ceos of banks and insurers yesterday. we were all positive about economic growth in the future, but we must bear in mind we don't want a financial crisis to happen again. our focus was looking at potential systemic risk in the system that could create a crisis in the future. we did spend some time on that. we were all very positive about the future. haslinda: what is different about this recovery? inga: we have had regulation coming very heavy, and we had a lot of rescuing from central banks of establishments that could have gone under. they secured the future, but a lot of the shareholdings in these banks by government bodies have now stopped. the future is looking bright.

when we look at potential systemic risk, what is interesting is that we came up with cyber as being one of the bigger risks these days. there has been a lot of talk at this conference about cyber risk. cybersecurity, high on every single business ceos agenda. big, that isall or a threat. -- no matter how small or big, that is a threat. one of the focus here is the u.s. economy. trump takes credit for it. if you are seated in asia, what is happening here, what is happening in the u.s. doesn't even matter. if growth is going to 7% for every country in asia, the rest of the world does not really matter. haslinda: lloyd's --inga: lloyd's is a very global business.

i was in asia last week. i was in hong kong, attending in asia financial form. the mood was buoyant, but they are all focused on asia. there is so much growth happening there. it is an incredibly exciting place to be. lloyd's as platforms and many of those countries there whether it is china, singapore. the future is bright. the gdp is growing, and we then see a demand for insurance. with 4 billion people in asia, they have got a lot to be positive about. haslinda: what kind of growth are you anticipating in asia? inga: for insurance, because it is so new and we have people having assets, business for the first time wanting to protect, businesses investing. we see 100 percent growth year on year and some of those markets. haslinda: could that compensate for a potential slowdown you could see? is alsor us, the u.s.

important. 40% of our business comes from the u.s. to see the u.s. being buoyant and growing is good for us. question mark. we have a big chunk of business in europe. that is a bit of a different dynamic at the moment, because of brexit, there is a question mark. haslinda: because of brexit, has there been a change of tone, softening of language? inga: the government does have conversations with businesses. behind closed doors, these days, nothing can really be behind closed doors. they can only really share with us what is out in the public domain. this is an incredibly public negotiation. it is so complex. just the amount of pieces of

legislation that have to be brought into the u.k. for financial services is something like 9000. it is astonishing. that is just one sector. the government has a lot of complexity to deal with. they have to have the negotiations in public. you don't want to reveal all of your cards. you have to play things close to your chest. it is a very difficult situation. however, we recently met with theresa may and the chancellor. they did fill us with confidence that by the end of this first quarter we would have a better about the implementation period of brexit, how long have we got to get our business models ready to be outside of the e.u.. you are making plans in brussels. how big is that? to ensure we can provide

that continuity to all our e.u. 27 customers. the reason we are going ahead, we are full steam ahead to be ready by january 2019, because lloyd's is a market, we have numerous members of the market, we need to give them the confidence there is a solution for them to continue trading post brexit. haslinda: when you take a look at the insurance business, there has been some kind of consolidation. there is likely to be further consolidation. at the same time, we have new startups happening. this is what is so great about the world and commerce. every time there is some consolidation happening, there is something new happening on the side. that fits into the lloyd's model. we have always been entrepreneurs. courage of

regeneration. we have mergers and acquisitions and things consolidating. we always have new startups, the new entrepreneurs coming in with new ideas, new products, being at the heart of innovation. haslinda: one more question before you go. we are expecting trump to deliver his message. what are you hoping for him to say? [laughter] we need him to seem optimistic about the u.s. the confidence from the u.s. isn't losing out to others. -- from the u.s. is then oozing out to others. the rhetoric from european leaders has been, come on, let's get read of -- let's not put up these walls. whether physical walls or metaphorical walls, let's not put them up. that has been a cry out from the rest of the world. the world relies on global

trade, free trade to be successful. if we can hear more of that, we could go forward. haslinda: we thank you for your insights. there you have it. guest says isolation policies will have to end. we will wait to see what trump have to say. anna: we will. just hours until president trump speaks. let's get a bloomberg business flash. trump have used his trip to the world economic of europe'srt some biggest businesses. he held a dinner last night with companies. millions of dollars coming into the u.s., and people are happy with what we have done not only on the tax bill, but also cutting of regulations. i think also being a cheerleader for our country.

juliette: del technologies is considering strategic options, including a public stock offering. the board is meeting later this month and will discuss its options. the corporate technology company seeks ways to boost revenue and raise funds. lvmh says it continues to get a boost from a luxury rebound in china. perfumes racing ahead in the holiday season. fourth-quarter sales rose 11% on an organic basis. everyrformance of division matched or beat estimates. intel has given an upbeat quarterly and annual sales forecast, signaling optimism that demand will persist, even as the industry scrambles to fix vulnerabilities. the company says sales and the current period will be about $15

billion hundred million dollars, and annual revenue will rise to a record $65 billion. the projections exceed analysts estimates. postedny has disappointing sales growth in all of its major regions, signaling it now has bigger problems than an overly saturated u.s. market. 2% last quarter, missing analyst estimates. jd.com is gearing up for its u.s. debut in los angeles later this year, seeking to challenge alibaba. the company is seeking funds to bankroll the bill to support the plan and aims to sell 15% -- the founder says tencent will take about one third of the shares and the deal should be completed next month. that is your bloomberg business flash. anna: thank you.

juliette saly in singapore. where francineos is standing by. >> i am pleased to be joined by our guest. here means that he remains the german. -- he remains the chairman. the u.s., positive or negative? we have seen tax reform, animal spirits come back. >> positive, mainly positive, because you have the tax reform, which has changed dramatically the state of mind of the ceos.

their reaction of jamie dimon and a lot of ceos saying it is great. it is bringing back a lot of money to the u.s., and they are going to invest massively in their own country. it is something that is positive. we see a lot of strength in many areas. believe 2018 will be a great year. francine: will that investment ?oing to advertising i wish they had already prepared to sell. being, the mood is positive. they will take advantage of the growth, and the best way to do that is to

invest. they have to invest in advertising, marketing, digital, and also in transformation. things are going well. mood, and there is a feeling, which is extremely positive for from the ceos, because at the same time, they had to face a lot of challenges. there is a digital transformation, and this is huge. they have to get prepared in order to face all of this new challenges. it is very positive for us, because we are one of the few which is capable of helping them to transform their business, to transform their market in order to grow faster. francine: how would you describe the last couple years? growth is on an upward trend. you would be expecting a little bit more spending in advertising. is the relationship between the economy and advertising changing? maurice: the correlation that we

had in the past, which was quite clear. it was almost a mathematical a slightlyyou had more growth in advertising been gdp. this has been broken this -- broken a few years ago thanks to digital. also, problems advertisers are facing with problems from activists, pressure from retail, pressure from e-commerce, etc. these rules are no longer applicable. there are some kind of correlation. the fact that growth is back, advertising should go up. that is clear. we expect advertising -- the advertising market to grow. if you look to global growth we are expecting, we are close to 4%. it is a number we have not changed since 2007.

it is 10 years though have not had such a growth. to mr.u.s., according trump yesterday, he is expecting to have more than 3% and is pushing to get something in the region of 3.5% to 4%. if this is going to happen, this will certainly fuel a lot of investment in marketing and sales. i am optimistic for the u.s. in 2018. trumpne: president arrived yesterday morning. he met with ceos yesterday evening. how was he received? maurice: he is a showman. i'm sorry to say that. he was owning the room yesterday. we were 40, 50 people in the room. all ceos.

it is a fantastic job at owning the room. to say he is quite good at mitigating -- good at communicating is obvious. he was optimistic at explaining what he wanted to do for the u.s. and why he was fighting to change the agreement of nafta and why he is wanting to adjust the trade balance between some countries and the u.s. and the fact that he is going to push for growth. if this is going to happen, i think this will create jobs in the u.s., which is the main objective. also, it will help raising the revenue income of households. that, itgoing to do would probably be something very good for the global economy also, because what is good for the u.s. is very often good for the rest of the world. francine: we also heard from president macron yesterday. how is he doing at home?

is he more popular internationally than at home? maurice: he is very popular at home. in as done a hell of a job very few months. all the reform he has done in six months is extremely impressive. labor law, tax reform. he has been facing a little bit of sliding scale for a short while, and then his images going -- and today something which is working very well. people appreciate the way he is explaining his policies and the fact that he is doing, which is

what we were badly needing in france. francine: one very short, final question. targets be set to for guidance? maurice: we are in the quite period for now. i'm sorry, there is nothing i can say. i can to you i am extremely pleased with the choice. the new ceo is a great job and i am very proud of the choice. i think we are going to surprise the market. francine: thank you so much for joining us. you see what happens when you have a french ceo? they are charming, even when they say no comment. manus: charm is everything. of course, that is what donald trump managed to affect in that room. a lot more to come from davos.

anna: later in the program, we will be speaking to the e.u. commissioner for economics and financial affairs. lots more to come. this is bloomberg. ♪ ♪

-- in 7:30 a.m. and davos davos. a little later on, the bank of joins theernor bloomberg team. it has been a long week. nejra: it has. we are ending the week and a height for asian equities. heading for a weekly gain on the msci asia-pacific index. today, a little bit of softness coming through after u.s. stocks closed last week.

a mixed picture across the asian region. china, higher. south korea, higher. australia closed today. a bit of wiki us and japan. the hang seng on the front foot in hong kong, but it seems with the japanese stocks weighing on the benchmark overall, those trading lower on a stronger yen. overall, emissary asian-pacific index flat. -- overall, the msci asia-pacific index flat. trump favored a stronger dollar. that boosted the greenback in yesterday's session. dollar weakness is back in today's session. i have a couple of technical to show you. the dollar is heading for a weekly loss, but this is showing that the bloomberg dollar index has broken the key 50% fibonacci retracement level. after we get past here, there is not a lot of long-term support until we get to 5% lower from here. aat is a little bit of bearish outlook. these indicators can sometimes contradict each other.

it's look at another one. the relative strength index is showing the bloomberg dollar -- bloomberg dollar spot index the most oversold in five years. that doesn't mean we will see it rally from here, but it is something to keep an eye on. the weaker dollar we have seen has given gold a boost this week. gold was weaker yesterday on dollar strength, but is back up today. it is heading for a six weekly gain in a mere 17 month high. prices may reach $1400 an ounce. the last time we were there was back in 2013. anna: that could be achievable was the headline reran. we are now on to banking. ubs and announced a strategic update on monday with plans for a $2.1 billion stock buyback and the shakeup of the banks target. we had back to davos where francine is joined by a guest. francine: our guest knows a little bit by that. our guest.ed by

give me a sense of where you see the investment banks going. use our restructuring. --you saw restructuring. any second thoughts? we are staying the route. the environment has evolved. number of regulatory changes, and therefore we need to adjust the model. earnedlosophy of being to play or we focus on areas where we are strong and always --ing to our cost of equity stakes the same. -- our cost of equity stays the same. low volatility is adverse to our model. francine: what is it mean adjusting the model?

talk to me about how you see m&a developing. andrea: it means that, for example, we start getting engaged in certain asset classes because we are very heavy regulatory weiss. exchanges or get clear, we can move, because they are capital light and returns may be higher. there are some businesses that are higher value or volume in -- or volume, and now we are less. developingment is fast. you need to stay on it. the philosophy behind it of the capital light high risk investment return model that can grow in dedicated segments stays the same it has been successful. francine: talk to me about m&a. i don't know what end of the spectrum you are. strong but has been slightly declining.

the acceleration we had in q4 were the biggest deals being done in q4. that should continue. global growth has driven that, confidence, it change in in the u.s., regulatory relief. we think that will push the cycle. we don't think that is going to be massively greater than what it was in 2017. francine: there is so much optimism here. i don't know whether this is because of the tax reform, because this is the world economic forum or the world economic outlook by the msf -- by the imf was better than expected. andrea: economically, we haven't had it so good in a long time. synchronize growth everywhere, low inflation. you can have it much better than that.

from a market standpoint, which a financial institution looks at, it is less clear. volatility is low. client flows are low. we are concerned there is a little bit too much of a comfort that everything is fine and nothing can go wrong. everybody is quite geared up. from a market standpoint, i have more cautious. from an economic standpoint, i sure the optimism of most people. -- i share the optimism of most people francine: could a pullback be due to geopolitics? changed in thes last three to five years is that instead of only considering

pullback due to monetary policy or economic policy or growth or whatever, now we have a bunch of politically and across the world. these things are more difficult to adjust to. out a method, the first reaction has been better than expected, but could have been worse. nobody knows the impact of such great changes of regulation and market structure. , for the time being, everything is relatively quiet. people are going through calmly, but as we get closer to the deadline, things can go wrong. we have a number of these things that can continue going well, but could also turned the wrong way. was better than expected, and now you're not expecting a can't -- expecting any concerns? we have been required to

change the way we report transactions, more transparency. that change technologically is difficult to execute. that has gone relatively smoothly. what is still out there and we need to see is how the unbundling of research from tocution, how that is going impact the industry. our view is that pricing and margins are going to be compressed, but volumes are going to move and concentrate towards market leaders. is a way tod further enhance our model and bring it to our client base. is the u.s.w investment to make doing? -- u.s. investment bank doing? andrea: it is doing well. post crisis, we pulled back significantly from the u.s. part voluntarily, probably not.

voluntarily, partly not. growr case, we continue to , not as i would have liked, but comfortably. it is a question of having patience and the way we build, in the way we gradually take share, and do that while we are -- we are very happy with the progress. if i speak to you in 2020, what will your investment bank look like that? -- look like then? andrea: generally, i think the tested. have has been and determined to take share in the segments we are targeting. i hope we will have significantly more share in the businesses where we are, and that means topline growth,

maintaining the discipline we focusn the way we run our . francine: how is china looking? andrea: good. 6% plus. we can debate it 6.9% is better than 6.5%. we believe there is some deceleration, and as we go towards 2020, it may even crack low 6%. the quality of that growth is better, and we china is positioning itself is positive. we see a lot of investor renewed in dressed -- renewed interest in confidence in what china can do. francine: the economy is changing, so it will not be infrastructure that would be built. are you worried about deleveraging? andrea: there are definitely still risks.

is a growth economy, so you need to anticipate risk and adjustment. i encourage you to spend a day or two in shenzhen, and you will see a transformation. as we look this year at technology ipos, probably half are going to come from china. the way they are moving forward and increasing value is quite impressive. francine: do you get off on bitcoin? any plans? from a ubs standpoint, a lot of clients are interested in it. our posture is we don't really understand the dynamics for brexit, value.

where do things come from? with are a lot of issues respect to money laundering, what is happening in the background, etc. we take a cautious view. we act as an agent. we are supportive, but we do not get involved proactively. here 24: you have been hours, two days. do people want to see your thoughts on brexit, europe, switzerland? what is a conversation you have over and over. andrea: brexit. francine: what do you tell them? it is more calm. everybody has a plan how to redeploy and relocate. we are waiting for march to see if there is any definitive agreement on transition. we are beyond maximum time now. i'll investment banks need to take a view -- all investment

banks need to take a view and start executing. march is the deadline. we are going to try to keep as much as we can in the u.k. as a firm. it is because if we all go back in history, we had a decentralized model in the past. we all centralized for efficiencies and to create a financial center that could be a balancing one to new york. that still holds. u.k. and e.u.t will have the solution that is in the best interest for your. -- interest for europe. francine: that was andrea orcel. i will handed back to you. we will have plenty more interviews today, including the irish finance minister. 1 manus: march is the timeline.

mifid is going to bring pricing down. we have much more to come. anna: a host of european ceos gathered at that dinner, which apparently went off script. the goldman sachs ceo. what does he have to say about u.s. tax? he spoke to us. we will bring you that interview next. this is bloomberg. ♪ ♪

we are live at the world economic your -- world economic forum.

joined by the be bank of france governor. he will be joining us for an exclusive interview. stay with us for that. but steady bloomberg business flash for now. --let's get a bloomberg business flash for now. usedtte: donald trump has his trip to court some of europe's biggest businesses. he held a dinner last night, attended by ceos of different companies. >> millions and millions of dollars are coming into the u.s. and people are very happy with what we have done not only on of tax bill but also cutting regulations. i think also being a cheerleader for our country. if you're are not a cheerleader for your company or country, the matter what happens, it is not going to work. country, no matter what happens, it is not going to work. juliette: dell is considering a public stock option.

the corporate technology company seeks ways to boost revenue and raise funds. that is your bloomberg business flash. manus: thank you very much. the ceo of goldman sachs has signaled he is not considering a management overhaul of the fixed income unit. he said the u.s. tax overhaul will make the bank more profitable. he spoke to bloomberg. benefits has a lot of for our industry. our industry was a relatively high tax paying industry. a goodd it -- they did job of widening out the base and having a rate that will be a common right for everybody. they have equalized the consequences versus keeping money overseas, versus bringing it home. i think it will make the system more sensible. >> with tax reform, economic growth, more normalized interest

rate environment with a bit of the regulation on the way, what will it look like over the next couple years? lloyd: higher by as much as we can make it. reporter: is there a limit on what you think it can be? lloyd: we work against an opportunity set. higher than they are now. no one will have that leverage. reporter: what about 15? lloyd: possible. the path.ven agree on we will not agree on the future. [laughter] reporter: you have been peppered with questions about the fixed income business, which had a tough year in the toughest fourth quarter since the financial crisis. what is the problem? this has been a poor part

of the cycle for the fixed income business. quibble how much of this is a cycle and how much of this is a permanent change. we wouldn't extrapolate if it was the most feverish part of the market and extrapolate from that. you have a flat yield curve, no volatility, and almost nose -- almost zero interest rates around the world. i don't think this is the best opportunity set. we probably under formed a bit even within the opportunity set we have. the strategic part is, how much are you investing? secondly, how well did you execute it? i think we could've executed better. as far as investment opportunity, we have an appropriate investment. it has been reduced. the market has helped us reduce

the opportunity. it is something under 20% our revenue, which is something we try to achieve. by a reallyt driving growth and other businesses. we had record years across the board in other segments. notwithstanding, a very difficult opportunity set and a difficult year, in which historically has been -- we have increased revenue. we so i performed in other segments that we have compensated for the week fixed income quarter. i don't think it stays that way. we get accountable for running the business throughout the cycles. at any moment, we are getting a lot of advice. we take it into account, but our business and commodity business is a jewel. if all you listening to stay in the plus or minus a few dollars

from the same price all year, it is not necessarily going to be the golden age of commodity trading. reporter: execution is a factor, strategy is a factor, talent as a factor come at you. -- talent is a factor, too. do you have the right people running the business? lloyd: yes. people have said a lot of things about goldman sachs. i have never heard that we lack the talent. reporter: that is fair. thed: you have explained weakness by saying goldman is indexed to a certain market. what deeming -- what do you mean? lloyd: there is a certain kind of opportunity set. reporter: does it have to do with clients? lloyd: sometimes. or energyce of oil stays the same, how much are you going to spend too had your energy risk if you think that tomorrow you will wake up in the dice will be the same?

-- and the price will be the same? reporter: less. lloyd: west. it's not that the margins of the business you do are smaller, people do less business. nobody ever said there was a lack of talent at goldman sachs. it is all about donald trump. he has already made waves at davos in the dinner last night. lots of executives with various takes on that. let's ring in, bloomberg's managing editor. good morning to you. met with visa ceos last night, a host of europeans with ceos. i saw that one described it as weird. president trump told them they will like what he has to say today. what else have we been hearing? >> it was certainly an interesting meeting. he holds court, and he brought

back here. he had the seals around the room and he went by one by one and said, what are you doing? they say we are investing this much here. he would not in approval. engaging ceos, trying to get them to commit to the america first message. one ceo said it was slightly weird. there was a lot of theatrics involved. he apparently had a speech that he pulled out of his pocket and then ripped it up and threw it away and said this is going to make my aids nervous, but then shot from the have a little bit -- shot from the hip a little bit. he has been pushing hard on the american first -- on the america first message. he is pushing hard on that message. people trying to tell that what is good for america is

good for you. i think that is something that we will see in his speech later. manus: good morning. he was called a showman. who was in charge of the dollar, treasury secretary, trump, steve mnuchin? mnuchin comes in. trump comes and correct them. it is not clear. defending shockwaves. we are seeing u.s. officials come in. problem coming here and dropping grenades and causing waves. we will be taking them all day to see what other surprises are in store. manus: that gives a little bit of volatility. have a great day. coming up, brexit and the big picture. has the british prime minister made an impact at devils? ?- at devils -- at davos

anna: we will bring you more on the theresa may conversation. this is bloomberg. ♪ ♪

manus: good morning. i'm manus cranny. i met edwards. here are the top stories. manus: trump's davos debut. foreignent lose leaders. but george soros says he's a danger to the world. anna: the dollar steadies after a roller coaster ride. u.s. officials sent conflicting messages. manus: several eu governments are said to be open on a transition brexit. beyond 2020. beyond 2020.iod

♪ manus: welcome to daybreak. it's 8:00 a.m. in dollars. we are going to set out the day for you. trump, the show man. he owned the room. you own davos. it was really interesting. he's really like a businessman. he was asking, why can we not grow more? it was interesting to see the president work. we will hear that keynote speaker, donald trump. a lot of people have stayed longer to be sure to listen to him. we will sit down with the eu commissioner. it will be interesting to see what he has to say. policy talk monetary with francis central-bank

governor francois villeroy de galhau. what we heard from mario draghi yesterday in weakness in dollar. we will talk about what happens from here. we will also be talking to the danish prime minister. later on today, i will moderate a panel. by ray, i will be joined dalia of bridgewater. amongst others. manus, anna? manus: let's just check in on these markets. it's going to be about the dollar. the bounce unsettled the u.s. markets. unsettled slightly on the european equity sessions. europe is opening a little bit firmer. blackrock and ray dalia both warning against sitting on your cash. dalia says it's stupid to own

cash in this environment. good for stocks, bad for bonds. too much savings on the sidelines. you are seeing these equity markets all add to their gains even though george soros is warning that the trump administration might be a danger to the world. the topplingredict stock market and went on to rally. we are on gdp watch. anna: let's look where we are on the asian equity session. coming back a little bit. we have the australian markets closed. a holiday there. getting a little bit of a celebrates reduced, perhaps. dollar weakness, of course, is the biggest story there. that's a we continue to see. the comments by president trump, a cacophony of comments.

officials of the trump administration commenting and down most around the currency. it did plateau the dollar for a little bit of that has given way further downside and we are now down a half a percent. the other side of that, the euro is up against the dollar. where we left off yesterday, as , andi talked of factors draghi said he's someone else that is in plain by the rules, steve mnuchin. seems that story hasn't ended. trump,rump, -- manus: magician, wilbur ross. everyone has a comment. draghi avoided a strong swipe.

the rest of the market. we see a small reprieve in the bond market. or going to move into a new reality. there's a trillion dollars of supply to comment 2018. what does that mean to the bond market? bid to cover ratio, 2.73 times. you offer a decent enough yield. are we in a bear market? those the lines that came through. he's talking about potentially moving by 1%. the worst ride in the bond market since the 1940's. juliette saly with the business flash. donald trump is said to want to defy robert mueller fire robert mueller in june. that's according to three people familiar with the matter. the new york times says he ultimately relented when his counsel threatened to resign. mueller emerges as

seems to wrapping up a key phase in his investigation. world soros has said the economic forum should know that trump's is a danger to the world. soros says he's expecting a democrat landslide in the midterm elections and trump defeated in the next presidential race. >> clearly, i consider the trump administration a danger to the world. but i regarded as a purely temporary phenomenon that will disappear in 2020 or even sooner. in china, profit growth in industrial firms moderated for a third month after factory inflation decelerated to the weakest pace in more than a year. industrial profits rose 10.8% last month compared to 14.9% in

november. the producer price index fell for a second month in december. this is bloomberg. you can find more stories on the top . you saw japan's index close lower by 2/10 of 1% -- .2%. some mixed movement coming through in earning reports. look at hong kong and china, continuing to rally. particularly -- particularly the h share index. it's on a tear. the regional index on track for a seventh consecutive win. let's look at some of the stocks. in're seeing weakness taipei. a lot of concern about the outlook for some companies. isernet initiative japan moving into blockchain

technology and unveiling plans for a digital currency venture. soaring in tokyo. we talked about the weakness in earnings in south korea. typically from the hyundai group. down by 8.2% in the session. thank you very much. several eu governments are said to be open to extend the brexit transition beyond the december 2020 deadline. that's good news for the british prime minister, who is been trying to garner support. may spoke to bloomberg's editor in chief in davos. she isted by asking if prepared to trade on a redline to gain more access to the single market. prime minister may: the city of london is obviously hugely important for the u.k. that it's also hugely important for a global financial venture, the european union, and the rest of the world. i'm positive about the future for the rest -- city of london.

the city has developed over a number of years. it's a whole ecosystem around financial services. it's important. >> would you be prepared to do what macron said which is withdraw bid on some of those red lines like the jurisdiction of european courts to get more access? prime minister may: what i'm working for negotiations and in december we reached excessive negotiations on the first discussion. what i'm now looking for is the implementation. , the. of time to allow businesses to adjust to the relationship after we have left. we want to develop a deep and special partnership. a comprehensive free trade agreement. we recognize the importance of financial services and we want to ensure we can continue to

keep those financial services. to financialalking services in the u.k. as i have done previously. positive about the advantages the u.k. has. i want to build on those, to make the u.k. and even more attractive place for financial services to be. >> would you be willing to pay for access to the single market? pay a little bit more and get more access for financial services? thee minister may: one of things we agreed on an discussed in the first set of negotiations was the financial settlement of the uk's withdrawal from the european union. we are now going to the second phase it is the basis on which we will be able to trade. also, future security partnerships with the european union. in all of these areas, i'm positive it will be able to get a good arrangement for the future. in arrangement which is a conference of trade agreement

for the united kingdom with the european union. the reason i believe we will be able to come to that arrangement is because what i see talking to other leaders. we must be pragmatic about this. it's to the benefit of the eu as well as the u.k. that we have that good arrangement in the future. the less savory part of city of london, we had the president's club dinner. harassment, male entitlement. you have worked both in the city and westminster. for this it take misogyny to change? wase minister may: i frankly appalled when i read the report of the presence club event. attitude and the objective occasion of women was something in the past that we had managed to overcome. sadly, what that event showed is that there is still a lot of work to do. i will continue to work as i have done in my time in

politics. where wentinue to work can say that women are respected and excepted and treated as equals. that was the u.k. prime minister cometary -- theresa may. our reporter is in london for a couple of days. your story this morning talks about the eu being open to brexit transition lasting longer than 2020. sweden, about hungry, we heard from others in davos. they are lobbying for more flexible approaches. is this flexibility or striking clear lines of difference tween the core of europe and the periphery? >> there are differences and it is about flexibility. a lot of these countries realize how difficult it will be for the u.k. to strike a trade deal. they are thinking, if you are

not going to get a trade to after three years, let's go to happen then. have thisling to transition for as long as you want. as long as it takes. we let it go on and on. that's worrying to the brexiteers back here in london. they are saying, if all we are is in a transition for indefinite amount of time, have we really left? anna: there are people behind the scenes that would not be pleased to hear. yes, that's why the official line is the transition will end at the end of 2020. of closer we get to the end 2020, that's when they will start saying, perhaps you need more time. what they are saying now, privately, is when that time comes, we will be quite open to it. anna: thank you very much.

now to the ecb. mario draghi said the euro strength was justified by the regions booming growth. he hit back at the u.s. treasury secretary steve mnuchin saying the weaker dollar was good for u.s. trade. we are joined by the governor of the bank of france. we will get on to the euro-dollar spat. we will start that inflation expectation. first, thank you for coming on. i want to talk to you about something close to your heart. you can do as much monetary policy as you want. but if we don't have the same growth coupled with reforms they could and badly. at what level of the cycle are we for european reforms? europe is back.

the euro is a success. it supported by 74% of european citizens. complete on have to the economic pillar. his is one of the priorities of this year. if we don't strengthen this , monetary policy risks being overburdened. agree, including in germany that monetary policy should not be the only game in town. theeans strengthening economic union. we have a historical window of opportunity. germany has been weekend. angela merkel has been weekend. weakened.

weakened.kel has been -- it's ait's up with promising prospect but it's up to german suicide. there are three practical accelerators for this economic union. knowing the bulk of economic policy will remain domestic, and we need domestic reform, the first thing is capital markets union. it's very important. here, french, german, and a couple others agree. also is a better implication of macroeconomic policies. and some kind of common fiscal capacity. to put the three elements we need a european finance minister. francine: does brexit make that easier? don't think brexit

changes as part of the storage are medically. it's one reason more. how is france doing and do you have the correct monetary policy for france? francois: it's the correct months or a policy for the eurozone, including france. the expectation of growth is impressive. year'sook at last figures, we will have a growth of 1.9%, strongest since 2011. high net job creations. a significant increase in business confidence and investment. that's probably the main effect of the new government. i'm meeting here with several ceos. they are all interested in paris is a financial center. you feel something new and

exciting in the air. francine: what about the animal spirits of france? macron came here to say france's back but france's back within europe. that is important. as an independent central banker, this new government has been quite efficient in accelerating reforms. it has passed and implemented lots of things in less than four months. this was a promise but they fulfilled it. an alleviation of capital and investment taxes. becauseains to be done we need to believe france. francine: how many questions you get above a high euro? francois: mario draghi had the question yesterday.

we said that the volatility of the european exchange rate and the uncertainty requires monitoring its effect on inflation. this is what we said and clearly we have no exchange rate objective. our only objective is stability. we have to monitor the effect of exchange rate on the inflation. because of the u.s. treasury secretary showing up in dallas and saying that a weak u.s. dollar could be good for trade, is this talking down a currency? is it currency wars? listen carefully yesterday, there were different declarations from different officials. the only thing that mario draghi reminded, without quoting anybody, was the terms of reference agreed in common.

as late as last october in washington dc, what we all said, including the new u.s. administration, was that we will not target our exchange rates for competitive purposes. this sentence is very important. it's a rule of the game. it's a rule of mutual trust. it's good for the public and good for business. worry moreo you about inflation not taking hold you worry more about the exchange rate? our only mandate is about price stability. speaking of monitoring, yesterday, what is the effect of the inflation outlook? francine: how can you be so sure that inflation will come to europe? francois: we see it in the last two years. to deal with the danger of deflation. that is now over.

the message we expects -- expressed yesterday with the message of confidence and patients. confidence because we are past of gradual normalization of our monetary policy. this gradual number -- normalization is progressing in an efficient way. but patients because we are not yet their. when we change the language to guide the market into something else? our monetary policy is not relying only on net trays and figures. that concentrates the attentions of the market. have many factors.

we said clearly we would reinvest and keep a high amount of stock for an extended. of time. you have the active level of the instant -- interest-rate. when you look at our toolbox and market expectations, it's important. time will come, be patient. we gave predictability and clarity until september. we are clear about the sequencing. we are clear about the direction of our monetary policy. we have a whole spectrum of instruments. we depend on the data. francine: if you were to decide now, given what you know, would you change communication? francois: we are predictable

that we are not fully committed. we have three or four monetary meetings to decide. be patient. francine: you think the markets want to know too much? there was in the last couple of weeks, a repricing. especially german bonds. why is that? is the market going to quickly? francois: we have a steady hands policy. we are extremely predictable. everybody knows exactly what will happen. this is predictability. markets would always like to know more and more. this is probably the normal rule of the game. our responsibility is to decide in due time. you look at the italian elections, do you worry they will be disruptive? francois: this is a very

important point. our role as a central bank is not to worry about elliptical uncertainty. it's a look at the economic consequences of political uncertainty. remember where we were one year ago? we expected lots of uncertainty. saw was a eurozone as an anchor of stability. there are political questions in germany. there will be political questions and italy. it's not my role to comment. but we have seen no economic consequences. it's a different situation than the u.k. with brexit. do you ever worried that we are too optimistic? growth is back, unemployment is going down. i would say, there is

room for confidence. we are confident about the present growth cycle. but there is no room for complacency. i'll role as public authorities is to use this window of opportunity, which is economic and perhaps political. we will decide and implement the necessary reforms. we need them domestic. also of the european level. confidence, yes. some place no. francine: that's very clear. we will leave it there. that's the president of the bop .he fonts --banque de france we will be speaking to more officials from dallas.

well done on that interview. the euro still topping out here at a three-year high. he's efficient, there's labor and capital reform to be done. the recent volatility requires monitoring. confidence but not complacency. a quartet of talks they used. don't focus too much on just qe or just guidance. that was the message she had. manus: louis vuitton boosted by china. intel, no meltdown on the chip side. anna: also reporting numbers earlier. we will be joining the dallas team shortly. manus: if you are deciding to hop onto the two are get into

the car. switch on to radio. stay tuned on tv. lots more great interviews. ♪ this is bloomberg. ♪

♪ good morning and welcome. i'm guy johnson with matt miller who is in berlin. castrate less than 30 minutes away. ♪ cash trade less than 30 minutes away. -- guy: the box elsewhere? washington can't seem to make up its mind. says issury secretary happy with the dollar going down. but the president says he wants a strong dollar.