anna: good morning. manus: this is "bloomberg daybreak: europe." and these are today's top stories. anna: janet yellen insert term on a hawkish note holding the case for more rate hikes as she hands the reins of power. manus: the fight over rights. theresa may pushes back at the formpt to extend protection citizens until 2020 one. meanwhile the cape prime minister expects to sign deals in china. anna: tech titans change course. hoursok shares rise after as ad your revenue beats estimates. ♪

anna: welcome to the program, this is "bloomberg daybreak: europe." we're in the midst of earnings season. nomura,numbers from third quarter trading profit ¥87.7 billion versus 108 y.4 billion the previous time. this is in comparison to same quarter the previous year rather than in comparison to estimates. -- ¥530.6 billion. revenue moving higher, brokerage commissions moving higher. investment banking fees moving higher, asset management fees moving higher as well. so the trading profit moving to the downside. we seen from a number of angst

concerns about fixed income trading. how much has retail and investment banking offset any weakness in that fixed income trading? that's the question going into these numbers. japanese stocks have been rallying. that could be one of the reasons we've seen brokerage commissions doing nicely compared to this time the previous year. novartis, ande this is what russia has delivered. inther dividend increases swiss franc. the core earnings-per-share is a ins, the market had penciled 15.53. the guidance they are giving to the market, they're saying they expect low single-digit guidance , stable growth, but they're talking about low single-digit range. back in july, they increase the focus to mid single-digit

growth. so there's a bit of a question mark there in terms of the guidance. earnings-per-share is amiss. they are talking about dividends in the future. the big companies that should benefit from the tax reform in the united states, they believe at roche,r, and they're seeing a number of their drugs being hit copycat, they are trying to rebuild that pipeline with things like the hemophilia drug and multiple sclerosis. so it's amiss on earnings-per-share and the guidance for dividends tomorrow is a promise. anna: will return to pharmaceuticals later with key interviews. and nokia, these numbers look to be, fourth quarter looks to be better than estimated. adjusted euros ahead of

the estimate. net sales came in ahead of estimates as well. a host ofving us guidance and forecast for where they see operating margin coming through. this is one of the interesting lines to look for. the forecast for the operating 2020. 9%-12% for sectorblem for the whole has been as we saw demonstrated by ericsson, the numbers disappointing. they weigh down the entire sector yesterday. the mobilephone characters -- carriers are not prepared to do big investment in the infrastructure. consumers are stagnating in the amount of revenue there prepared to get the mobilephone companies. all that is happening in the background but these numbers seem to have come through better than estimated after yesterday's numbers from ericsson.

less get to the risk radar. the day after the fed, we want to see how the equity markets are coping with what we heard. a slightly more hawkish statement from the fed as we see the changeover from yellen to powell. the equity markets are not phased, that seems to be the answer. positive start to february after a fairly positive january. start fors the best the s&p since 1997. so a strong start for 2018. nymex crude has edged up as we've seen production search 10 million barrels a day for the first time in four decades. we have a host of conversations to have over the next hour and a half. the cfo just walked into the building, settling into the green room.

let's get your first word news from hong kong. has been u.s., the fed unchanged under chair janet yellen. paving the way for march hike and investments have been solid. pick for hers replacement will be sworn in as fed chairman on february 2. u.s. oil production has surged above 10 million barrels a day for the first time in more than four decades, marking a profound shift in global markets. that comes weeks after the international energy agency said american oil output would push past saudi arabia and russia this year. you drilling and production techniques have opened up billions of barrels of u.s. recoverable oil in the past 10 years reversing decades of declining output in turning the

nation into the next quarter. the u.k. prime minister has vowed to fight the e.u.'s attempt to extend section for ex-pats until 2021 as a condition for a transition pe riod. she argued there should be different right for european nationals will arrive in the u.k. before brexit day next year. anti-establishment movement is ahead in opinion polls in the run-up to the march elections. its leader has told bloomberg people should not be concerned that a victory first party would lead to major disruption of the countries economy. >> we were not leave italy in chaos. we will make an appeal on issues. less bureaucracy, lower taxes, investment and justice and infrastructure. >> global news, 24 hours a day,

powered by more than 2600 journalists and analysts in more than 120 countries. find more stories on the bloomberg at top . asia has been a busy day with a wave of earnings. india's budget also in the spotlight extending the best start to a year since 2015. the nikkei 225 is rising for the first day in seven sessions with earnings very much in focus. the cost is nothing a two day pi with the two day drop. shifting gears when it comes to recession in hong kong and china . on course for the first -- worst weeks in 2015. investors calling for more de-risking on wednesday. lenovo has deeply declined after a surprise third-quarter loss.

fujifilm soaring in tokyo, rising no since 2008 on the back of iraq's merger deal. anna: thank you very much there from hong kong. .ore on our top story is last policy meeting under chair yellen, the federal reserve kept interest rates on hold a paper way for march rate hike. u.s. and banks have gains employment and business investments have been solid. manus: market sees a march move as a near certainty the fed funds futures indicating a 99% chance of a hike following the fed's latest decision. some heavy hitters weighed in. >> were dealing with a fiscally unstable long-term outlook in which inflation will take hold. the breakout will be on the inflation upside. the only question is when. >> the real challenge going forward is the federal service tightening into a, or easing up

on dietary policy tightening in two ways. one through rate hikes but also shrinking the balance sheet. that will get more more complicated. >> the deficit is moving up close to trillion dollars and that's because basically that the fed itself is reducing its balance sheet. buy the who will current level of bonds. >> think there are two bubbles. we have a stock market bubble and a bond market bubble. at the end of the day, the bond market bubble will eventually be the critical issue. but for the short term, it's not too bad. still giving1 and edicts on bloomberg tv. alan greenspan along with a host of other voices. , looking at what the

fed did last night, everyone seems to be so focused on further gradual increases. there was a slightly hawkish tilt that did nothing to save the dollar. the skew within markets has always been to bed against the hawkish fed. the fed are in heller -- inherently risk-averse am a we know that. they will slow down if they need spiralinancial markets out of control. there's no consensus on the state of the u.s. economy in that's quite a orton. there are so many mixed messages , certainly within the and its. third and most importantly is the fact that the fed have consistently is their inflation target since the crisis and that has led the fed to actively start reconsidering its policy framework. third and most importantly is see all that being

discussed. as long as they debate stays on that side of the equation, for us the fed is a redundant factor for the dollar. anna: i read an opinion -- an opinion piece talking about all the noise in banking generally and suggesting that of course the boards will be divided and you just have to tune out all the conflicting views as they have to come to some sort of consensus. on the subject of where rates go in the united states, i have this chart that users of bloomberg can pull up. just underlining how far we have travel in terms of rate expectations for the month of march. we see this hand over to howl and almost immediately we get a rate hike. is that where your money is? viraj: no, actually. we think the handover might require a bit of patients. in my be one of those cases where the markets force the fed's hand. i think the fed will look at markets, they don't want to

spook markets. this is where the disconnect comes between who controls what, the fed or the markets. beyond that, the fundamentals are ok, not great but ok enough for the fed to pursue march. year, 22%s time last probability of three hikes. this time around 38%. something david stubbs brought to our attention. ci is what the pros look at, obviously. the basis of this is that you highestes, 2.68%, the since the first quarter of 2015. wages are rising, and this is the specter of inflation. maybe this is part of what alan greenspan is referring to. does this shift your thinking in

terms of the tightness of the labor market in the united states? viraj: ladies going up is sort of the consensus for a couple of years now. there are two points to make your. the speed at which we get higher wages, and i don't think we will get in a massive shocks. we need sustained pickups in wage growth and we make it one or two good months for that pickup, but the sustained manner that coming through and the wage growth levels are much lower than they were before. central banks are worried about actelion low inflation for longer and maybe there's more than what they initially thought and allowing for that capacity to be used. tightening to quickly is a bit of a risk in that sense. yesterday we talked about president trump's claim that wages are going up and we showed a chart showing wages are not going up in the united states,

that was an annual figure and this is a different set of data. this is more month by month quarter by quarter. it matches the biggest twelve-month gain, so it's taking quarterly data. i suppose you can make data fit anything. in terms of what guides the dollar 2018, we've had a number of conversations about global growth, synchronized global growth story and how that is what is guiding the dollar. investors just say all hold all the other stuff. that's the structural reasons we site for dollar weakness. and we have what we like to call the works uriel dollar policy adding to that potentially the u.s. administration might fuel some of that structural weakness in the dollar and instead of

seeing a gentle decline in the dollar, there may be policy of risk rhenium and seeing some of the dollar weakness come through or quickly. now we have lowered some of the to 100.orecast from 110 just on that story. those are two new words. a little bit of commentary coming through. minister. budget the target for the budget year will be 19, budget gap of 3.3%. in 2018, it was 3.5%. he went on to say we were considered part of the fragile five and suffering from policy

paralysis but we have reversed this. exports will rise by 15% is his message. finance minister saying it will become the world's number five economy soon. just setting up was targets for fiscal year 2018 and 2019. coming up, will speak to the cfo about full-year earnings in the acquisition of the westfield mall. we will also talk a little bit about exit. later a conversation with the novo nordisk ceo. ♪

manus: a live shot of sydney

harbour there. the aussie dollar down by .3%. is it overcome, the building frenzy in australia? building approval fell 20%. the aussie dollar down for the fourth day in a row. a bit of a shakedown in the global growth story overall. that's just nipping at the heels of some of those commodity currencies. bank ahead ofish an estimate for a lot of -- a loss of -- in that quarter. 4.6 billion in net interest income against the estimate of 4.36. we continue to watch the banking sector and we have those numbers from nomura later today. manus: full-year results narrowly beat expectations, rising 7.2%.

of boom and demand for paris office space. anna: joining us, the cfo, good to see you. spoke to you was over the phone on the day of the westfield deal. no doubt we will return to that. tell us a little bit about current trading. is beingffice boom talked about in the wake of your numbers. this is corporate in france spurred on by macron to invest more? is being talked about in the wake of your numbers. what is the story that is boosting your numbers? quick some people say francis actually back. it has been some time. we've seen since the elections in may and the parliamentary elections in june a resurgence and business confidence. it started to be reflected in

retail sales as well as demand for office. but i saiday this, this yesterday. to the extent that people try to figure out where to relocate, where we know we can get the people, brexit creates a level of uncertainty. in thek is helpful central business district. manus: to what extent do you see an overlap in bringing u.s. clients into europe and vice versa? next there's not a huge amount of overlap, yet. that's where we see one of the opportunities over time, interacting with u.s. retailers want to come to europe and vice versa. we've already had retailers in europe and the u.s. reach out to support weit and received from retail has been very good. anna: what kind of disposals what you have to make as result of the westfield purchase?

this is something you must be talking a lot about. are you concerned the right be a lot of non-prime real estate coming to the market at the same time? or if you are rejecting it for some reason, are we in danger flooding the market with that kind of asset for sale? jaap: i hope not. last year we sold about 10 million euros worth of assets to a appraised value. we always have to think about what we would consider non-core is considered high quality by people looking to buy real estate. because rents are indexed linked, it's generally a good long-term investment for folks looking for stable income. manus: the other figure that struck me is incredible in the u.s. in your, the difference in foot per000 square thousand people. 2856, look at your, it's a little bit lower in your.

are we about to embark on a significant reshaping of that market? jaap: that trend has been ongoing for some time. manus: do you think it will accelerate? jaap: over time, it will accelerate. europe has not been the headline that tells the growth story yet we been doing well. quality, the right location remains the critical determination in terms of buying quality real estate. the industry will continue to to change because there will be more and more distinction between the walls that people want to go to those they can go to to get stuff which they can get online. how well hentioned did at the time when europe was not doing well. now europe is growing and there is a string to the european growth story. how does that influence the rent you can get and how well you do?

there's also the structural story away from malls to some extent and towards online. how do those two things result in rent? jaap: you have to look at what channel people are actually shopping on. tenant sales last year up i .7%. people shopped online as well. they can coexist for the right locations. like for like, up 4.3% in the retail division. manus: we are available for advice. anna: when are you coming to london? up next, it's budget day in india, as we've been telling you. we'll go back to him by -- back

to mumbai. anna: these live pictures coming to us from new delhi. this is bloomberg. ♪

london, 3:30:30 in in tokyo. a live shot of the emperors palace. dollar-yen higher in the situation this morning. very little from the fed. the topics getting dusk and the most in four weeks, and the banks moving. a little bit of a move up by 1.8%. any strengthening in the end could have an impact on the markets. we have a couple of numbers to break.

nordisk delivered their numbers, operating profit up by 1% in 2017. the market had penciled in 49.3. dividend of 7.95 danish krone. 2%-5% as the guidance they are giving for this year. the estimate was 7.79. the issue for novo nordisk is very simple. only spent $500 billion in the past number of years on m&a. were waiting for confirmation go through on their deal. the numbers this morning are

very much in line, that's what we got from novo nordisk. the scandinavian banking business, reviewed in numbers coming through from them. fourth-quarter net income being the highest of estimates, giving us interest, net interest income. this is broadly in line, the buyback program that talked about today, new program of 8.1 million shares, up to a half percent of registered shares. update on the markets. >> here's the picture across the region, japan outperforming on the upside, china underperforming on the downside. the s&p 500 closed out pretty a slight positive

bias yesterday and despite the two days of losses prior to that, the best start to the year for u.s. stop since 1997. take a look at the next chart, it lowers seen a touch of dollar index today and we did see it briefly erase some of its losses in the session yesterday following the fed decision, overall, january was a bad month. not a great start to the year for the dollar. looking at treasury, the 10 year yield continues to head lower but higher today, up two basis points on the year. i want to show you this curve, flattening. yesterday we saw it flatten to the flat is since august 2007. less about the fed is what some analysts are saying and more in terms of portfolio rebalancing toward the end of the month. but something to keep an eye on.

taking a look at crude oil, a little bit of a lift in this session despite the fact that inventories rebounded for the first time since november, breaking the streak of 10 weeks of decline in inventories, but also production jumped going above a certain level for the first time since 1970. interestingly, wti rising along with it in the session. our guests,o let's talk about japan. the boj offer to buy more bonds for the first time since july, bringing down yields once again, underscoring the commitment to the yield control policy the boj has in place. at the start of the year a lot

of people were raising questions about how committed the boj was. now we seem to have at least a short-term answer. viraj: the focus should be on the target level. the quantity will fluctuate month-to-month. put upward pressure on jgb yields. anna: it does test their commitment, doesn't it? testing and more march time, to have to ask themselves how committed they are. viraj: this is the big challenge. some point this year they will have to consider potentially raising the target. the idea would be what triggers that. we see it as an unrealistic probability. two conditions have to happen. it's a synchronized global

growth story underpinning it, and it's a synchronized central-bank normalization story. that mitigates the yen effects on a trade weighted basis. i had a message from a viewer, they tracked 52 central banks come and they expect the hike to cut ratio to double in 2018. that takes us back to the fx story we had yesterday. japan and europe are losing the currency cold war. when you look at that kind of expectation, where is the winning currency in that? the dollar had not responded last year, so we put the dollar to one side for a moment. who wins in that scenario? viraj: currency thrives on unpredictability. it's where the gap between

interest rates should be and where they are right now, where that's the largest, that's where the currency effect will see the most punch. think there's more of that readjustment story left but equally with the yen and where the markets are not prepared for that. as soon as the central bank let's its foot off the pedal, currency markets will try phone at. is pretty much everyone else against the dollar. cold wars are not fought in the open battle but with words and covert actions. use marketnd to interaction. mario draghi uses verbal intervention as well.

where are you thinking in terms of the currency wars in 2018? viraj: we saw it with mario draghi given a verbal warning to the u.s. administration last week. i think it's only of currency start trading away from fundamentals. let's not get carried away and try and drive the dollar away from fundamentals. we know the dollar is structurally weak that let's not private aggressively lower. that's one of the reasons mario --ghi did not actively that's what has been driving the euro. the ideas that central banks are not necessarily trying to get involved, but there is certainly a bit of noise around here, cautious that things are moving maybe to quickly. anna: there are a few opportunities to change the environment 2018.

the trump administration likes to talk about bilateral trade instead of multilateral trade deals. i was interested to see that in the export data from china we saw the strengthen their currency was damaging some of the chinese export engine. that's been such a part of the globalization story for so long. where does the trade story take us this year? viraj: it's the trade policy agenda. talk and no all serious action from the trump administration and in that sense, the world has just kind of learn to live with that. we think the dollar is the loser there. it changes some of the power thrust. the risky currencies start to get more pain and those that

rely on trade may find a bit of pain. the indian finance minister is delivering his budget speech to parliament. india has banks to focus on farmers and its rural population and the prime minister looks to win over the voters next year. good to see you this morning. the finance minister is on his feet, he's bilingual in his speech. his talk about growth and giving us budget numbers. what are the highlights for you this morning? >> out of the one our budget speech, so far 30 minutes has been going on infrastructure, so that shows time for -- how important the farm sector and the rural part is for the prime minister. but the budget has told us is

that nearly $225 billion will be spent on rural infrastructure. last year the whole budget was up nearly $340 billion. that shows how much infrastructure spending is going to go on. that means the fiscal deficit numbers have gone a little bit awry. for fiscal year 2018 is going to be 3.5% of gdp compared to 3.2% which was targeted. next year it's going to be 3.3% compared to a target of about 3% that they had laid out. anna: in search of growth and boats. a government economic survey recently spoke about policymakers needing to revise capital investments to achieve higher growth. can the budget achieve that, is

that something we will see a focus on here? will we see a focus on revising capital investments? >> very much so. the growth target for next year has been at 80%. that will make india one of the fastest>> very much so. growing major economies in the world. that will happen only if the bank start lending and corporate start borrowing. they will bill more capacity and create more jobs and that should see the population much happier. that's not happening because companies are piling on debt repaying those. -- sectorate separate wants to get them investing again. we'll see if the finance minister does announce any reduction in the corporate taxes. that should make india very competitive given that the u.s.

has lower term corporate debt this year. anna: thanks for bringing us that story. finance minister in new delhi still delivering his budget speech. tdc, the dealme sites 19.50 5 billion kroner. they intend to increase the 2018 dividend, a give to their .hareholders the board unanimously supports the deal and recommends approval. so more dealmaking coming through on european landscape this morning. anna: coming up, building a free trade deal. how far has theresa may got with her post-brexit plans? the latest live in beijing.

manus: and after facebook admits that people are using it less, we will talk tech and look ahead to apple earnings. this is bloomberg. ♪

anna: is is "bloomberg daybreak: europe." it's 1:47 in the morning in new york. s&p futures suggesting will be higher, which is interesting in itself in the face of a slightly more hawkish statement from the federal reserve. equities have held up pretty well as you look at the asian session and u.s. futures. in extendedplunge trade after ebay said it shifting its payments business from its longtime partner, the dutch company.

ebay wants to lower processing cost for merchants and more choice for buyers although paypal will be a checkout option until at least 23. until 2023. us at cap cfo joins a.p. in u.k. time. boeing has received a contract to continue managing u.s. missile defense system. contract extends knowing's management role for six more years, through 2023 and raises to $12.6 billion. includes overseeing the addition of 20 ground-based interceptors with the 44 already stationed in california and alaska. facebook has said changes to the platform have reduced time spent on the social network by roughly 50 million hours every day. at the same time it reported for

order revenue of $12.97 billion, beating analyst estimates. ceo mark zuckerberg said helping people connect is more important than maximizing the amount of time they spent on facebook. the most important things we can do is make sure our services are good for people's well-being and for society overall. so far this or, we have already announced a couple of important updates. the first is prioritizing meaningful social interactions over passive consumption of content. juliette: and that is your bloomberg business flash. that: theresa may and chinese primary offered a bullish vision of the two nations trade relationship post-brexit. speaking in beijing, they laid the foundation for the future trade agreement, setting up a panel to expand trade ties. anna: she also said the uk's hoping to strike an additional 9

billion pound deal to her three day visit to china. tom, good to have you on the program once again. what deals have been struck so far and what is in the work? tom: we've had a few lines dropping in the past few hours about these deals, spending sectors from agriculture to energy to technology. fairly signed a deal for 750 million pounds. jd.com, a huge e-commerce country has said it has done an agreement to sell about 2 billion pounds worth of u.k. goods into the chinese market. we've also had the chinese say they will open of the financial markets around insurance to u.k. theresses and apparently are new developments in a mega-city being dealt on the outskirts of beijing.

the deals have been coming through and were hoping to get more details. the devil will be in the details when it comes down to this, given that some of them will have been in the pipeline for some time and so may fall through at some point. manus: obviously the emphasis is about bringing home a message of victory. people challenging her about her ability to stay in power. if we look at the trade relationship, she has a little bit of a gift in regard to a free trade agreement, looking at the state of play. china's number seven in terms of exports for the u.k.. fta did get in terms of being thrown a bone? >> you are right to point that out. 2010 has grown 60% since but the u.k. likes behind countries like germany when it comes to the trade relationship with china. there is a lot of catching up to do. arcade.s as a terry or

high-level officials will be looking -- it sounds esoteric or archaic. takes a step further toward official discussions around when that is able to happen. we heard from the trade secretary in the past few hours, saying it will take time to get this deal, of course. the prime minister will meet president xi in beijing in the next few hours. she will have tea with him and she may talk about trade and possibly about north korea as well. someone is clearly doing well for the catering, anyway. that's the latest from beijing. viraj is still with us. let's have your thoughts on what happens to the pound from here. clearly she wants to do more trade. philipd from chancellor

hammond that we are in a sweet spot. do we stay in this sweet spot for the u.k.? viraj: what is getting at is that serving can rally against the dollar and the rest of the currencies of its ground, if that makes sense. the rally is not as much in trade weighted terms. the biggest gains will be seen against the dollar. got to 140, and that's what we're expecting this quarter. we were surprised at the speed with which we got there. 145 as theoking for u.k. economy regains its cyclical swagger but we need patience before investors will take that on. manus: there is a conversation to be had in terms of position

in the market. i was taken to task on this. i talked about on positions in the market. the specs are long. the point that real money lags the speculated position. when i seerk up change in the view on sterling. doing inhe real money your view, and do you agree with jordan rogers that that is the next wave for the pound? viraj: structurally markets are short the pound and the euro. we still think there is some upside in these currencies left. but real money investors need some good fundamentals coming out from the u.k. economy. we don't think that's going to happen overnight. and second, progress in brexit.

beyond that, just making sure that things are going smoothly, so those things need to happen coincidentally. it has to happen. anna: we need more evidence of that cyclical swagger being rediscovered. this is the pound and inflation expectations moving in tandem after the post-brexit divergence. there was a time when they did not move together, and now they do. mark carney was just saying the focus now is on stopping inflation getting too high. it's a different balance of risk from last year, or is it too early to say that? viraj: it's a completely different environment. last year it was the bank of england's worst fear. it was in raising the warning things aresting that

spiraling out of control. they managed to get that under control and get away with a rate hike. potentially more come through over the next couple of years, and that story puts the flaw on the pound basically. manus: great to have you with us this morning. you, youbeen telling have the indian budget, this is a live shot of the parliament. we're not part of the fragile five, and growth is on the agenda in india. anna: determined to become number five in the world in terms of the size of the economy. that's the message of the finance minister a little earlier. the fed cap interest rates on hold but pave the way for a

march rate hike. we will discuss that next. the get out equity markets are faring, not bad in the wake of those fed comments. this is bloomberg. ♪

manus: good morning. i'm manus cranny. anna: and i'm anna edwards. this is "bloomberg daybreak: europe." manus: the fed chair ends her term on a hawkish note, building the case for more rate hikes as she hands the rains to powell. anna: theresa may pushes back at the e.u. prime minister expects to sign deals in china. manus: tech titans change course. ebay ditches paypal while fair facebook shares rise. ♪

anna: good morning. this is "bloomberg daybreak: europe." back into the earnings season. let's get into these numbers from daimler. they are forecasting slight growth for 2018. if we look at the numbers this morning, 3.4 7 billion euros, that is below the estimates of 3.7 3 billion euros. they are also talking about their aspirations towards alternative fuel, battery sales, electric car sales, so a lot of focus on alternative energy sources. no surprise given the scandal that dieselgate was for vw. we are now into year three of that scandal afflicting another automaker. becoming a bit of a headache for

the sector as a whole. the most recent, perhaps overshadowing all this, is the animal trials testing that has been used during diesel trials, which was done by a now closed research group which was co-funded by daimler. some of the challenges this fuelsss faces, changes in , we are seeing a change in corporate structure. a lot breaking news this morning. manus: little bit of telecoms now. vodafone with third quarter services revenue. it misses estimates. growth, justevenue a very slight miss. when it comes to the guidance, full-year organic adjusted growth of around 10%. they are reaffirming their full-year views. telecoms had a tough year.

, they expect the underlying mobile service revenue to continue to improve across the overall footprint. in germany, a modest underlying slowdown. a modest underlying improvement in the u.k. growth reaffirming their full-year views. it is a very slight miss in terms of the revenues. you've got unilever. anna: unilever reporting numbers, and we have not got news on where they plan to put their headquarters. they've been reviewing their structure with the united kingdom and the netherlands, and there was some talk about whether we get a result of that deliberation today. we expect to conclude it shortly , is the headline from them. in terms of the underlying performance, sales up by 4%. theestimate does seem to

for 3.8%. we will get some clarity. we are getting some information on how they performed in the fourth quarter. a lot of focus on how they are performing in emerging markets, what they're planning is looking like. they appointed headhunters. he's put social impact at the heart of unilever's strategy. ceo, that is at 7:50 a.m. u.k. time. talking of companies that have a lot of business in the u.k. and netherlands -- shell royal dutch delivered on their numbers. today, they deliver fourth-quarter adjusted profit of $4.3 billion. 4.12 billions dollars. the adjusted downstream profit,

the upstream profit was $1.65 billion, and cash flow from operations, $7.28 billion. exxon barely delivered 4%. shell has delivered nine on 13%. we are looking at the highest earnings from the time when the oil market actually collapsed. it trades at 15 times earnings multiple. that is a little more expensive than the rest of the market. in terms of the corporate results, there's a charge of 300 to $350 million. liquefied natural gas volumes fell 1%. 8.52. the integration of gas production, the big gas deal they did last year, is going to have a positive impact for them. discipline and confidence, and they expect liquefied natural gas sales to rise by 12%. this is really vying for the top

spot. this is the man we're going to have a conversation with. ben joins the bloomberg team a little later for his first interview of the day. identified $2.56 million. let's talk about the markets. we've had a little bit of a lift. the dollar has managed to turn it around. we had the fed last night shifting their language a little bit. slightly more hawkish. is it relevant to markets in 2018? not according to ing. 90% probability of a rate hike. you have got this rise in the equity markets. the question is what happens next from the fed. you have nice earnings in the banks, in the japanese reporting session, in the past 24 hours.

anna: quick correction on daimler. we were saying the daimler forecast was for slight growth for 2018. the correction on that, they do see their 2018 gbit in magnitude of previous years. nuanced change there, but important to get that correct. something of the magnitude of the previous years. interesting. let's talk about where we are on the asian session. we got a slightly more hawkish fed. whether equity markets were going to be able to hold their own, whether they continue to be unnerved, into february, looks as if we are not unnerved by a tightening cycle continuing. msci asia-pacific up 0.4% and s&p futures suggesting we will be higher once again. 0.3%. up by

january was the best start to any year for the s&p since 1997. nymex was up more strongly than this earlier on, but we are flat . let's get a bloomberg first word news update. here's juliette saly. the fed has left rates unchanged in its last meeting under chair janet yellen. the central bank paved the way for a march-, saying gains have been solid. it also upgraded the outlook for inflation. will be sworn in as fed chairman on february 5. u.s. oil production has surged about 10 million barrels a day for the first time in decades, marking a profound shift. that comes just weeks after the international energy agency said american oil output would push past saudi arabia and russia

this year. new drilling techniques have opened up billions of barrels in the past 10 years. the u.k.'s prime minister has vowed to fight the european union attempts to extend protection for ex-pats until 2021. theresa may said the block should stick to its original cutoff date. she also argues there should be different rights for european nationals who arrive in the u.k. before brexit day next year. india has pledged to focus its budget on farmers and its rural population as narendra modi looks to win over voters. according to people with knowledge of the information, that will see finance minister arun jaitley widen his goal. they say the budget deficit for the year will be 3.5% of gdp

instead of the 3.2% targeted earlier. 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 . sessionfairly positive across asia with the exception of china. you see that big fall, down by 0.7%. chinese domestic stocks heading for their worst since 2016. a recovery on the nikkei. closing higher by 1.7%. its only win in seven sessions. solid session in australia as well. the regional index up 0.4% or so. in terms of stocks, a ferrand of corporate news today. fujifilm, that deal with xerox, jumping the most since 2013. moody's putting fujifilm on a review for downgrade after the deal. by 2.4% in hong kong

after it posted a surprise loss in the fourth quarter, taking a $400 million are due to u.s. tax reforms. celltrion is one of the hottest stocks at the moment, but it has been hit by a short seller and the u.s. fda sending a warning letter about one of its products. anna: thank you. juliette saly with the latest on the markets in hong kong. back to our top story. in his last policy meeting under chair yellen, the fed kept interest rates on hold. the u.s. central bank said gains in employment, spending, and business investment have been solid. it also upgraded the outlook for inflation. manus: the market sees a march move a near certainty. fed funds futures indicating a 99% chance of a hike following

the latest decision. some heavy hitters weighed in. >> we are dealing with a fiscally unstable long-term outlook in which inflation will take hold. the breakout is going to be on the inflation upside. the only question is when. >> the real challenge going forward is, the federal reserve is tightening in two ways. they are easing on the monetary policy tightening in two ways. one, through rate hikes. also, they are shrinking their balance sheet. that is going to get more complicated. >> the deficit is moving close to $1 trillion. that is because the fed itself is reducing its balance sheet. buy the who will current level of bonds. >> i think there are two levels, a stock market bubble and a bond market bubble. at the end of the day, the bond

market bubble will eventually be a critical issue. for the short term, it is not too bad. manus: not too bad, the men that christened a rational exuberance. gerald fitzpatrick is the cio for emea. two bubbles, bonds and equities, agree or disagree? >> a lot of people say there will be a bond bubble and it could derail the market. i don't see that. i see a slight increase in where treasury yields are going. the market is taking it in stride. look at the equity market. look what happened in asia. see the equity market taking it in stride. momentum is pretty good. bond yields are starting to grind higher, but i don't see a bubble. anna: what about alan greenspan saying there's a bubble in equities? do you see a bubble in equities?

s&p start to a year for the since 1997. >> the market is just going up. it is either exuberance or euphoria. it is not necessarily a case of saying that valuation has been so extreme that it is not rational. there's a lot of great earnings coming through. we'll are seeing topline revenue growth. that builds on the cost savings and global synchronized growth across the growth -- the globe. i can see exuberance potentially. we could be moving towards euphoria. i don't necessarily see a bubble in equities. still see the underpinnings of the economic strength supporting's. manus: i'm reflecting back on our conversation. i was in zurich yesterday. anna was on the radio with michael o'sullivan. he chatted about the declining world trade. we've had synchronized growth.

i never saw so much euphoria at davos. this is telling me something different to all of the rhetoric. that send any kind of signal to us about perhaps being a little bit wary? >> clearly momentum is driving up a lot of earnings, a lot of equity price at the moment. that ratios are clearly high. if you contrast that on the cyclical side, there are spots of concern relating to world trade, relating to gdp. there are spots of concern there. always a case of looking at the potential disconnect between where rising equity markets are. first is the economy, which is good, but not fantastic. we believe that equities right , to bea global basis

underweight the likes of more highly valued markets like the u.s., but to be overweight markets where there is still more value. anna: how does this picture from the fed change your view? expectationsarket of what the fed does in march. essentially the expectation is almost entirely that there is going to be another hike, a continuation of the hikes we've seen from the fed, but under a new leadership. does this change your thinking at all as you see market expectations building? >> this is not going to be an incredibly exciting fed meeting. that is what we got. the good news for the market is that is pretty seamless. the market was anticipating the nine which -- the language would be pretty neutral to slightly hawkish.

it is highly priced in that there will be an increase in march. the equity markets slightly up, the bond markets not selling off. the big question going back to chairman greenspan is inflation. we are of a similar opinion that inflation will rise. the question is when and how much. anna: thank you very much. gerald fitzpatrick at russell investment. a bit of breaking news. we've been following the indian budget. 10% long-termg a tax on equity gains above 100,000 indian rupees. arun jaitley, the finance minister, still talking there. we did see some reaction in the sensex as a result of that. we heard from our correspondent in mumbai earlier on. focus on corporate tax.

that is what we are looking out for from here. earlier, itine from is about minimum government and maximum government. forecast a rise in exports of 15%. india is on course to achieve a growth rate of 8%. trying to give a fairly bullish message. facebook reported another record quarter of revenue, but users are joining at the slowest rate. we will discuss that. this is bloomberg. ♪

anna: this is "bloomberg daybreak: europe." facebook may be changing, but the business is as safe as ever. the company delivered another record quarter of revenue, $12.97 billion. shares rose 1.4% in late trading. facebook reported 1.4 billion daily active users.

that amounted to the slowest user growth on record. time spent on the social network declined by 50 million hours. joining us, peter elstrom in tokyo. what do we make of these facebook earnings? >> it was a very unusual earnings report for facebook. mark zuckerberg talked in the press release about how it was a good quarter for the company, but also challenging. he talked about how the company needs to have a more positive influence on society, needs to make sure it is not distracting people from what they should be doing. people are beginning to spend less time on the site. as you mentioned, there was this decline in north american users. offsetting that was the increase in revenue. the company is proposing that it is going to change its feed and

some other things that have been gaining so much attention, and try to increase the quality of the content. anna: today we look ahead to apple earnings. there's been a lot of talk about the iphone x. apple among those u.s. tech companies reporting earnings today. what do we expect there? >> huge day for earnings reports. all eyes will be on apple when it reports. attention is really on the iphone x and whether there is going to be a slowdown in demand. there's been a lot of reports out of asia that suppliers are in theng to see declines expectations for what the phones are going to sell. it is not clear whether apple has delivered a product that is spectacular enough to meet the expectations for this company. investors are looking forward to a little more guidance on that front. anna: peter elstrom joining us live from tokyo. manus: those iphones, and.

gerald fitzpatrick is our guest from russell investment. we are going to see what kind of guidance we get. there was a cracking article the other day, saying they would warn their suppliers maybe that they weren't going to produce as much. to what extent is apple potentially the canary in the tech coal mine? we've got a lovely chart which shows all the banks and a little bit more. we've got netflix, amazon, google, facebook. they are roaring ahead. how do you look at tech? >> the tech sector has been fantastic. cheapness in the u.s. dollar has helped. see the increase in digital advertising, movement towards the cloud, really strong support for the tech sector. with that comes an increase in

price and expectations. people start looking at the price, the expectations, they look for some indicators. , will thatse factors be enough to excite the market? these are the questions that are out there. we have faith in the tech sector. anna: rmb versus m&a. we see some of these companies bringing back money to the united states. how much of a driver is that move going to be? >> good news is bad news. that leads towards the tax bill and a big decision what to do. going to be interesting and i think it is an indicator of potential success. does it look at the company in terms of buybacks or dividends? do they actually start spending the money? if they investe in the top talent, invest in the

to someat could lead really in the project range. manus: shell quarterly earnings are back to where they were when oil was trading at $100. everybody's fawning at the altar of this. shell is back on track. >> the risks are taken out. there's a lot of demand there. no big risk in china. you put it in the european context, the u.s. is doing really well from a cyclical prospective. anna: a lot of earnings this morning. daimler profit missing estimates on a rising expense bill. thank you very much for your time, gerald. gerald fitzpatrick, cio at russell investment. that is it for "daybreak europe." shell's ceo will be joining matt

miller on programming in the next hour or so. traveling, there's always bloomberg radio. ♪

matt: welcome to "bloomberg markets: european open." i'm matt miller in london. the cash trade is just 30 minutes away. ♪ matt: the yellen narrow and the fed chair leaves rates unchanged. it is now to jerome powell to pull the trigger. how will he react to a potential increase in the budget deficit? fourth quarter in the bag, unilever sales beat estimates. the review of the share structure is expected to