♪ anna: good morning from bloomberg's new european headquarters in the city of london. u.s.s and asia and the turnaround, recovering some losses. volatility subsides after the vix sank almost 20%. manus: the british chamber of commerce warned theresa may that u.k. businesses are losing patience over brexit ambiguity. manus: -- anna: the ceo resigns after being embroiled in a sexual-harassment scandal. ♪

welcome to "bloomberg daybreak: europe." it's just gone in a cup a.m. in amsterdam -- 8:00 a.m. in amsterdam. full-year operating profit beat the highest estimate, this is a bank which runs most of its revenue -- which runs most of its revenue from the u.k. economy. to buffers of , 17.7%, the dutch win right in line with what the analysts expected. what does this mean for dividends? the capital remains intact. the final dividend comes in at 80 euro cents per share. from?did it come

let's talk about metals and miners. anna: let's have a look at what has been reported. remember our conversation with -- from blackrock management. tinto full-year underlying profit $8.63 billion. they are giving us details on their net income and they've added a share buyback of one billion u.s. dollars in rio tinto shares. he said of the sector that many investors have been very patient through recent turmoil. this is the world's second-largest mining company. materials had a good year in 2017 because of stronger global growth. goldman sachs confidence on iron

ore and copper. they are giving us guidance and thing that production guidance is unchanged from the first quarter operating review. joinse ceo of rio tinto the bloomberg team at 11:30 a.m. u.k. time. we need to talk about beer. manus: we do need to talk about beer. logger -- lagfer world.ager in the this'll be a difficult set of numbers to break down. the organic beer volume dropped by 2%. this time last year they were hit by the plastic bottle been in russia -- ban in russia. they are saying that organic growth in operating profit is going to be in the mid-single-digit percentage in

2018. you will have an impact on operating profit. it looks like transport will have an impact on profit. the net income for the full year is significantly below the estimate, 1.2 6 billion is a .26l year net income -- $1 billion is the full-year net income. adjusted misses the estimates from the market. i am just scanning quickly through to see what the other elements are. for $4.87te was billion. softbank. numbersftbank reporting

this morning, third-quarter operating income missing estimates. , in terms ofdline third-quarter operating profit, that is lower than animus -- analysts have been estimating. the mobile unit will still be a quote, major consolidated unit of softbank. there is a chance that shares might not be lifted upon review. they have not said much about the u.s. side of the business just yet and that is of course were much of the focus is. we heard from the ceo back in november. will no longer be a big headache for this japanese business. market, theetitive collapse of their merger talks means perhaps they are looking around strategically for something else to do in that market as they battle with a lot of the big carriers there.

the domestic japanese telecom site, how much they have been spending to acquire new users in that market, with a focus on these numbers as well. we've seen a roller coaster ride at the start of this week for global equities. 0.i asia-pacific is up by 33%. we were up by more than this at the start of the trading day. the nikkei 225 was up by more up by%, but now it is less than 1%, so some of those gains are fading a little bit. how solid is this bounce that we are seeing inequities? -- in equities? just checking in on the u.s. 10 year yield, we are at 2.77. yields dropped down to 2.7%

yesterday, but then bounced up a little bit. volatility is the root of all unrest. nikkei volatility is pretty anemic at the start of trade today, relatively speaking. 20% onay we closed down volatility. the question for the markets really encapsulates the issue for the market. the volatility in the equity market, which is your blue line, exploding, as i say. suisse said the market distortions cannot last. the equity market volatility exploded, but relative to the bond market, the bond market volatility, although that was the dog that land the tail -- tail, theagged the

volatility in the bond market is nowhere near the distorted volatility that you have an equity market. this is what you need to consider. volatility bets around the world are $2 trillion. there is $11 trillion of negative yield and bonds -- in bonds. credit suisse says not to panic in terms of customer flow. we have your first word news. has -- house of representatives has passed a stopgap spending bill to fund the government until march 23. a senate vote would have to go back to the house before thursday's deadline. he willt trump says

welcome another shutdown if democrats continue to refuse the demand for an immigration overhaul. president trump: if we don't get rid of these loopholes where killers are allowed to come into our country and continue to kill, gained members, and we're talking about ms-13. if we don't change it, let's have a shutdown, we will do a shut down, and it is worth it for our country. i would love to see shutdown if we do not get the stuff taken care of. reportedlyrump has ordered up to gone to plan a ordered torade -- plan a military parade. during his visit to france in september, he hinted that america may hold a military event. south african president appears to be a step closer to resigning.

that is after the ruling african national congress delayed an emergency meeting to discuss whether to force him from office. this came after constructive talks between zuma and deputy president. his state ofponed the union address. adjusted net income rose to $1.3 billion, compared to a loss of $40 million one year earlier. that comes after norway's biggest oil producer slashed costs while at the same time raising oil and gas production. the ceo joins us later. u.k. businesses are split over how to move forward with brexit planning in light of government uncertainty. that is according to the british chambers of commerce. in an open letter to theresa may

come at warned that there was quote, no room for continued ambiguity as companies try to make decisions for the future. 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 . checking in on the market action in asia, we do see asian stocks a three-dayhalting drop. closing up, just there, after jumping more than 3%. korean stocks are seeing losses. you have banks and property players dragging in shanghai.

let's check in on one of the casualties, that is -- real estate. china ever grand bucking the that move -- china evergrande bucking the that move. over in tokyo, electronics with the biggest boost. led gains. the recovery in asian stocks has shown signs of faltering, even after u.s. stocks faced a turnaround yesterday. the dow jones climbed by over 600 points. the house of representatives passed a stopgap spending bill to keep the u.s. government open until march 23. manus: as the pin over for stocks or is the selloff just

taking a breather? the return of volatility to the market was healthy. >> having some volatility come back into the market and having are mores back to it -- at a more appropriate level is quite a healthy thing. i think the markets are still vulnerable to a slowdown in growth momentum. anna: let's get the thoughts of the head of fx strategy. good to have you on the program. when you look back to what we saw on friday, what we saw on monday, what are your best thoughts? what are your years of experience telling you about what caused what we saw? and is it over? >> i think the trigger was the run-up in yields and the expectation that we would get more inflation than we thought.

i think it has been building for quite some time. it struck me that a number of commentators are saying the same thing, that nobody is really predicting a u.s. recession, we have good fundamentals. equity markets have been overvalued for months. we have still got pretty good fundamentals. manus: we had a guest who said if we can get to friday without the central bank having to defend the markets, so take a look at this -- this is volatility. -- does this suggest that the volatility mayhem is contained within equities, specifically in regards to short-vol trades? >> i think the answer to that is yes. if we look at emerging-market

currencies, they are generally the most vulnerable to panic. the first signs of panic, people rush out of emerging-market currencies. this sign that this is largely related to the fact that equity market valuations is something -- are something that we have been talking about for months. the fact that nobody is expecting significant slowdown or a recession in the u.s. has meant that some of these other riskier assets in emerging markets have been fairly all right, despite the chaos. anna: i've got this chart for you. dollar swapoomberg index. we see a rebound in stocks after the selloff and the point being made that generally the downtrends in the dollar have persisted throughout all of this. where are you on the dollar right now? potentiallye are at

a very interesting juncture come up with respect to market juncture, with respect to market sentiment. what are still going to be looking for higher yields and still going to be buying emerging markets. if we have higher yields in the u.s., that of course makes the dollar more attractive. it could be that we have a period of a little more stability for the dollar. manus: markets are shaken, jay powell was sworn in, what he have to temper his message -- would he have to temper his message? as you look through the rest of the data, it suggests you have a strong economy, a tax reform, and therefore the fed should stay the course in your eyes? market rout?ty

>> the market has shown that they will go in march. now it is a little bit less sure. be far too reluctant to say that, but what i would say is that yes, we have got stronger -- then we have expected. we still do not have a huge amount of core inflation in the u.s. core inflation remains quite benign. we have to know if we have this buildup of inflation potential, or if all of these structural forces are still working their magic and keeping inflation keepingw -- in inflation quite low. we still have not resolve the issue. manus: we still have much to get to. coming up, we will talk about the euro rally.

they blown most of the predictions for 2018. what exactly is causing the rally? this is bloomberg. ♪

♪ anna: this is "bloomberg daybreak: europe." equities, they are firmer. 25%, but we by 0. have been higher than this. they're in mind that u.s. futures are negative. let's get a bloomberg business flash. >> steve wynn has stepped down as ceo and chairman of wynn resorts after being embroiled in a sexual harassment scandal. the company said its board reluctantly accepted his resignation.

need -- a new ceo has been appointed. says fourth-quarter sales jumped 72% to $285 million. daily users rose. profit at the company's -- remains in retreat while the film studios big comeback awaits a bigger slate of films. excluding its tax benefits, sharegs rose to $189 per while revenue grew to $15.5 billion, missing projections. forecasters are heading

back to the drawing board, bluese the euro blues -- the predictions -- blew right past their predictions. anna: they euros rally comes as the region's economy is up steam up except steam -- picks steam. remind us where you are on the euro and how strong you think it could get. after saying in the last conversation, equities really the focus of the volatility, not so much the fx world. your forecast remains intact. >> that was the story of last year come it kept on hitting the forecast. 124, but i do have this perception that we need some

consolidation, perhaps a little bit of a fallback on euro-dollar. it seems to be any doubt, but things have changed -- panning out, but things have changed. if we have high yields, that would be dollar supportive. volatility-- if this does turn into a bigger rout, i think that would be supportive of the dollar and would freak out an awful a lot of people in the developing world who have dollar denominated yields. an increase of the volatility in equities is probably dollar supportive, as the market gets more nervous. manus: we will talk more about that in a moment. view, i absolutely concur

with you. if we look at the positioning on positioning is stretched. it is stretched on the euro. would it surprise you if people began to take a little bit of profit on that? it sounds like mario draghi wants to step back on his inflation. he has talked about inflation and the need to get there. what makes sense to take some money off of the table -- would it make sense to take some money off of the table? >> the market has been anticipating that perhaps we did not get an interest rate hike from the ecb this year. with the bank of japan, the market was convinced that the bank of japan would be stepping back. i would say that that type of speculation as a little bit ahead of itself. both mario draghi and kuroda

have been pushing back against this speculation. i think we are likely to get a continuation of that dovish talk. anna: we have seen some strong data out of germany. does that involve the hawks at the ecb? >> i think it keeps the hawks at they -- bay. the hawks in germany are not going to go away. the pay deal that they have got, it is quite substantial. i think it is very interesting, because one of the reasons that we have low inflation is because wages, wage growth is so low. without wage growth you are not going to get consumer demand. anna: it is an interesting story we were covering this week. thank you very much. she stays with us. volatilityext, while

is back, the question is, how vengeful will it be? how long will it last? this is bloomberg. ♪

♪ afternoon inn the tokyo. the dollar is strengthening by 0.33%. despite volatility dropping in the fx dollar --. mr. kuroda has been on the record talking about yield targeting. anna: some breaking news from the french drugmaker. the focus on 4 year profits and how their diabetes drugs are performing. in terms of the numbers first, they have given us

fourth-quarter sales, 8.6 9 69 billionros -- 8. euros, which is broadly in line with what analysts expected. the last month they announced to buyover. a by over -- they went on a week later to agree to buy a belgium company. , both of those hoping to make the company a blood disorder leader. the headline across the bloomberg is in regards to ups -- eps. there is the guidance from the business. manus: nara, we've got a nice turnaround in the msci asia-pacific.

the theme of the market seems to be that they were oversold. nejra: absolutely. even the rebound that we have seen in the msci asia-pacific index really has moderated. it was up a lot more earlier. if you look across the regional picture here on this map, you can see it is a little bit of a mixed picture. we have seen gains in hong kong, japan, and australia, meanwhile losses coming through on the cost be -- kospi. there are questions if whether this is actually a rebound or if we are looking into the eye of the storm on the rebound. let's switch to the next chart. there are said -- some technicals that are important here. this is the relative strength index. we did drop below 30, which suggests that these equities have been oversold.

at the end of the chart, that line has just gone above 30. that tends to signal that momentum is going to start moving the other way. we might see more gains come although if you look at the u.s. outures, it is not looking to pretty. there is a chart comparing jgb's with the treasury. i want to focus on em here. historically that when we have seen a recent spikes in emerging market volatility, which is what we have seen in the past couple of days, that has preceded large rallies. are we going to get that on the msci index? what haseast is happened in the past. i want to talk about oil. we have seen a rigged --

rebound. we are awaiting the government ei data. this after brent broke through that 50 day moving average. it is now trading higher. equities rebound after this week's selloff, investors are trying to gauge whether the rout is over or whether markets are just taking a breather. cranfieldg in market -- mark cranfield. which of the havens that investors are seeking out --? >> what we are think in asia is exactly what you described their. there were some good games early in the day -- gains early in the day. most of the japanese market was

up by more than 3% in the early session. enclosed particularly unchanged on the day, so that is not a very good sign at all. we're starting to see some people going for gold come it is still trading above 1300, which is quite encouraging. we are seeing some strength in , which is probably the first choice a currencies when people want to put their money in something safe. yen is usually the first currency. gold and the yen are beginning to get a little bit of an interest in terms of a haven. manus: i think there is a couple of different drivers in terms of why would you turn back to the treasury market. , buts a wipeout inequities the second is of course that a term premium is returning.

perhaps it is time to look at the other issues in the bond market. >> indeed. this is one of the reasons why this time the haven plays might not be as clear-cut as they have been in the past. havens have been a place where people rush to for safety. the treasury's have caused problems in the equity markets. it does not look like the selloff in the bond market is finished. we could be looking get 3% on -- prettyrs he soon soon. that is one big haven where they need to find an alternative. commodities are holding up pretty well in general, so maybe some money will shift their. if you can't go into treasuries, you will be searching pretty hard for other things to look for. manus: thank you very much.

mark saying that the havens are not as obvious. you've got this together, this is the oasis of calm, this is mr. kuroda, the personification alm.omb -- cs mr. kuroda said that now is the , he said ithe time would be inappropriate to raise the target. .ere we go, oasis of calm -- should i plan trust in kuroda -- should i put my trust in kuroda? >> consistently he has been saying that they will adhere to their program. consistently the market has been saying that i don't really believe that.

last week i think was a very interesting week for the japanese market. the bank of japan did put its money where its mouth is. if stepped up the purchases of bonds. it really did try to indicate that they were serious about keeping the guild on the 10 year year close toe 10 zero. the value of the yen is still pretty strong compared to the dollar. the central bank is still hugely involved in qe. anna: let's get your thoughts on boolean.ersus it did not really perform like a haven, not compared to gold, at least. where do you see the most likely -- it is -- is it the old

favorites? or is it the swiss franc? jane: i think anyway you captured a lot of it by saying old favorites. when we come to say what defines a safe haven, the credibility and the fact that it is an established safe haven go a long way in establishing why it is a safe haven. -- we had were saying reports that the --. when the central bank comes in, it puts them off, which is exactly what the central bank is trying to achieve. the market is going to look at the yen a little bit more seriously. the yen, yes, safe haven. swiss franc, do you really want to risk it? es it the euro or is it th

dollar this year? manus: we have not touched on sterling. there was this open later -- letter saying that businesses were running out of patience and making the point that theresa may is perhaps not listening enough. what is going on with sterling? the volatility rose last week and the risk reversal in the aussie dollar dropped off. trumpinglitical risk anything that mark carney might be able to do with rates? >> i think we will be able to answer that within the next few months. if we go back to the beginning of december, it began to rise. this is not just a dollar story. manus: i finally found the chart, which is sterling volatility. [laughter] anna: better late than never. >> part of this was the

politics. after we had the deal done on the legacy issues in the middle of december, there was the perceived -- the perceived political risk seemed to decline. sterling was performing better, however coming into this week, certainly this month, we see this chasm between the different elements of the government, these big risks, and i think we're much more aware of the gap between the eu trade negotiators . i think politics should be weighing on the sterling. anna: you mentioned the euro and it's safe haven qualities. we were talking a lot about the resilience of the euro last year. it has become a safe haven, what a turnaround from 2011.

in 2018, if you're looking for the safe haven trade amongst the big ones, do we then go to the dollar or to the euro? >> i think it is what creates the need for a safe haven. we had a lot of north korean use -- news at the start of last year. meanwhile you are having this complete rethinking about fundamentals in the euro, with respect to politics and growth. suddenly the euro looked very good. fundamentals were very good, however, that was when you are looking get geopolitical -- looking at geopolitical news. if we are looking at maybe the emerging markets come if we got to the point where emerging markets were to get worried, then i think the dollar would actually be bid a little bit more because of the amount of

dollar denominated debt around the world. manus: thank you for joining us. we've hardly talked about north korea. it is amazing how myopic we have become in our focus. toa: when you are traveling work, remember that you can tune into bloomberg radio live on your mobile device. they are going to be speaking to the chief investment strategist at no deal was management -- management.h manus: we will talk about the banks full-year earnings, which beat estimates. anna: we will give you the latest on the global markets after the routs and the rebalance -- rebounds. this is bloomberg. ♪

♪ anna: this is "bloomberg daybreak: europe." s&p futures suggesting that we could be weaker. if you're asking yourself whether we are going to draw a global the rout in equities, will perhaps it is a little too early to decide that. u.s. futures are in the red this hour. manus: let's talk about one of the companies that we have had results on. the state-controlled deutsche bank wrote out the quarter -- out the quarter. joining us now from amsterdam is clifford abrahams to discuss the set of numbers. let's start with the message to

the market. policy, it isdend going to be a target of 50%. when will the bank note if it can pay a higher dividend -- know if it can pay a higher dividend? good morning. >> good morning. policy announced our new on dividends. rules were clarified at the end of last year, so we were able to clarify our capital position and dividend approach. it is too early for distribution. we are working through the details, but we are comfortable with their capital position now - with our capital position now.

you a can i just push little on that? you think you will be in a position to do something by the half-year mark? you've got strong capital buffers and are targeting the 17.5%-etween 18.5%? >> towards the end of the year we will consider it. are onnds on where we our capital position, but also a number of other factors. we will consider it later in the year, but we cannot commit to anything at this point, because that is the nature of our new approach. anna: can i ask you about the volatility that we have seen in the markets at the end of last week and into this week? what impact is this having on

your business at this time? >> we are a bank. we have some market facing businesses, some global markets businesses, have a global private bank, so we are here to support our clients during a volatile. period. we are pretty resilience during this per clearly there are concernsiod. about rising rates. we would welcome gently rising rates. manus: the cfos job is to manage risk and corralled the risk job is to- cfo's the risksk and coral

managers. cyclical. are they don't go up or down in one direction, so we should always expect cycles. have a moderate amount of our business that is exposed to the equity markets and we will work with our clients during these volatile conditions. we are feeling relatively comfortable during this volatile period. anna: can i ask you about management of the business? the bank has said that it is reviewing management overhaul. earlier this week, the chairman announced she will not opt for a second term. there were questions about leadership style. what made her decide that there was something about the management style that did not fit? can we have more detail on that?

>> i am not going to comment on the details, but as you said, she chose not to run for a second term and we respect her decision. i think the valuation that we announced reflects the new structure that we put in place at the beginning of last year. it makes sense that we review after one year to make sure -- to see how it is embedding. manus: did she have the support of the board? >> she has made a decision and we respect her decision. a outlookt about the m& for your business? -- you have seen from our results that we are delivering well. we have a strong organic strategy. we will consider acquisitions when we think they can add value to our businesses. we are actively considering sort

a, but we don't expect anything material in the short-term. manus: can we ask you about your domestic business? -- as you say, you have global parts of the business, but a lot of it comes from the dutch economy. are you seeing a real alpha in long growth in your business? >> as you say, the dutch economy is strong in gdp terms. our clients are increasingly confident. we are growing it in modest terms, so single digit growth in our commercial banking business here and modest growth in our mortgage book. we are taking advantage of strong market positions, supporting our clients, but doing it in a disciplined way. anna: thank you so much for your time, we appreciate it.

bloomberg business flash. sophie: thank you. steve when has stepped down as ceo and chairman of when resorts after being embroiled in a sexual-harassment scandal. the board is quote, reluctantly accepting his resignation. a new ceo has been appointed with immediate effect. ofmanaged to take advantage crude's recovery to a larger extent than many of its biggest rivals. this comes after norway's diggest oil producer slashe costs what the same time raising oil and gas production. the ceo joins us later.

softbank has reported third-quarter profits that fell short of estimates, and unveiled preparations for an initial public offering for its mobile phone units. operating profit was $2.5 billion after an increase in cost for user acquisition and itsdomestic business -- in domestic business. the french drugmaker said that earnings per share, excluding some items, will rise between 2%-5%. sanofi's profits fell more than expected last quarter. snap has jumped in late trading after its first big earnings when since going public -- win

since going public. toly active users rose 18% 187 million. the earnings were a part two advertisements -- to advertisements. manus: thank you very much. volatility in asia is eking out some small gains. increasingthey are the cost savings target by $380 million. they of course are taking a hit in terms of their russian exposure. anna: interesting. about m&atalking opportunities. they are also talking about watching for m&a opportunities, how would that go down with

investors? we will be discussing the our guests business -- guests business later. this is our guests bloomberg. ♪

♪ manus: good morning from bloomberg's new european headquarters. i'm manic -- i'm manus cranny. anna: these are our top stories. the u.s. futures point towards a lower opening. the british chamber of commerce warns theresa may that u.k. business is losing patience over brexit ambiguity. manus: the wynn resorts chairman and ceo resigned after being embroiled in a sexual-harassment scandal. ♪

manus: it's 8:00 across central europe. we told you in the headlines that the equity market is not exactly emboldened. a little bit weaker this morning. saw a little bit of a turnaround come through. volatility still rising in the asian session. we have the rio numbers. could the commodities be in play? goldman sachs says you want to be involved. you want to buy the market. you are still bullish on commodities. look past the technical reversal. signs.ld say beware the by 2.45%.s down

to a certain extent, let's double check those future prices but we will keep an eye on these prices. there's a difference between europe, where it is finishing and picking up from that asian session. we look for little bit of a rebound at the start of the trading day. it might not derail any bounce that we see in equities. the estimate was for a drop in the estimate was for a slightly bigger drop but it's not out of the ballpark. the estimate was -0.7%. engine,an growth domestically by the consumer story and also by the global growth export story. there's a fairly complex deal being done around wages with the union over in germany. aside from that, it includes some one-off payments.

our colleagues and germany say this should cheer up the ecb. it should move wages -- wages and even inflation. in terms of where we are on the asian equity session, it's positive but not as positive as it was and u.s. futures still point downwards. we are in a transition phase. earlier on in the session in asia, things have come off the boil a little bit. it is in positive territory but not i an enormous amount. pointing downwards, is the stock route done? perhaps not. checking on the u.s. 10 year. bonds, is where we ended up in equities.

againr yields on the rise . now at 2.77. paul'sthe reason why dax,a to the dad -- the slight slippage on the data front of the start of the show. equity markets up a half percent in london. i should say to you, the data in terms of volatility is rising slightly. the question is whether is contained. does it have systemic risk? mortgage backed securities, go have a look at a virtual gallo's twitter page. equity markets have managed to turn it around. taking heat for hacks of the oversold notification on the s&p 500. look at the or a size.

buns, the o.a.t.'s, the u.s. treasuries, all continue to fall a little bit this morning. as tove this debate whether it is time to buy into the bond market or whether the inflation story is really the one that you have to look at. yields rising. likewise on these u.s. treasury markets. can the market make it a 3%? is this the end or the beginning? sophie just put those words together. in the meantime, she has her first word news. the u.s. house of representatives has passed a stopgap spending bill to fund the government until march 23. a broader budget deal may be added to legislation. president trump says he would welcome another shutdown if the

democrats continue to refuse an immigration overhaul. if we don't change the legislation, if we don't get rid of these loopholes where killers are allowed to come into our country and continue to kill, there are many gang members as we mentioned, if we don't change it then let's have a shutdown. it's worth it for our country. i would love to see a shutdown of we don't get the stuff taken care of. donald trump has apparently ordered the anti-gun -- and to military parade so much of the bastille day celebration in paris. during his visit to france in september, trump hinted that they may hold the vent on pennsylvania avenue.

angela merkel and the social democratic party have negotiated through the night on a packed for the governments -- the country's next government. the chancellor and other top officials are holed up with spd leaders after no sign of a deal. a final decision is not expected until a larger group confirms. south african president jacob zuma appears a step closer to resigning. that's after the national african congress decided whether to force him from office. that came after constructive talks from zuma and the deputy president. due to give the state of the nation dress. u.k. businesses are split on how to move forward. many companies are disengaging from the process altogether.

that's according to the british chamber of commerce. theresa may warned there is no room for continued ambiguity. that comes as the prime minister cabinettalks for her over the negotiated positions and key issues. global news 24 hours a day power by more than 2700 journalists and analysts in 120 countries. you can find more stories on the bloomberg. checking in on the markets, we are seeing that rebound faltering. using the recovery as u.s. futures count lower. in the northeast asian region, you did see the nikkei retreat from the highs of the session. the cuts see is falling for a fourth consecutive date. there is little change ahead of policy decisions. over in china, large caps are sliding. weighing on the

honda saying. that is set to extend losses for the fifth straight day. we look at some of the players in hong kong as well. poly real estate sliding nearly 10%. some chinese banks are raising mortgage rates. softbankokyo you have snapping a droughts. that is as well as the revealed that preparations are underway. moody sky says the plan is negative for group creditors. let's turn to an earnings story that we can get some detail to. profits have beat estimates. the company has confirmed its four-year forecasts. it affects speciality lighting segments. us for nexto joins

loser interview. good to have you on the program. it seems you blown to the estimates to some extent. what has gone better than analysts expected? or maybe even then you have expected? thanks for having me on the show again. i think we had a solid start in the year despite headwind from this stronger euro. we grew about 5% on a comparable basis. we had double-digit growth in a pack. profitability remained high. path to continued our invest into future growth. overall, our expectations were met. i think what was maybe underestimated was the strong growth we had in a pack.

a good morning to you. it's manus. we know that the light systems solutions bid, you're talking to the union representatives. know, are wants to you going to bring that decision forward in terms of what you're going to do with it? are we any clearer in terms of what you have chosen for your option? when is the timing of it? good morning. , we areid in november looking at all the strategic options. we have taken additional measures to course correct on the cost structure of the business by shutting down another plant we have in eastern europe. we are taking this decision very seriously. will attack ae decision within our fiscal year which ends in september. that is unchanged.

manus: that's the timing. you have benefited from some smart phone manufacturers. how big a product can this be? >> face recognition and iris scan will become standard features in mobile phones. we see a lot of interest, particular out of china for these type of features. these are two different types of technologies. one is infrared and one is laser base. this is definitely going to be one of the big ones. -- manus: you talk about a tax benefit in the u.s.. sense, will you

reward employees? when you spend it on? it's not going to materially change her business, is it? it's the principle of the tax relief, isn't it? >> as i said this morning, will benefit between four and five or 6 million in terms of income. we believe the u.s. is a very important market for us. we think our business will grow strongly in the u.s. market. we intend to continue the funds to invest in the u.s. market. we have grown our employee base. we will continue to do that. >> can i ask a quick question about the euro? you mentioned how well you have been doing in asia despite the euro. level that you would raise your eyebrows? we kept the guidance for the year intact but i also said that

the current rates, somewhere between 123 and 125, is getting more and more vicious. anything beyond that would raise both of my eyebrows, if you like. we would have to take another look at measures. there's pressure on the earnings and the revenue base. manus: that's a whole new world that you opened up in terms of your eyebrows moving at the same time. well done on the numbers. we look forward to seeing and speaking to you very soon. join us now is another guest. we start with this recovery as i would put it to you. anyone can look at the chart. 4429, it is the relative strength indicator.

you can say it's a vintage metric and you don't put any store in it. oversold is the message coming through. is the great of all trade unwind undone? we understand that our -- that there are two chilean dollars bet against it. >> we came right up there. that the effect is predominantly complete but is not to say we don't have further volatility in markets because there have been a lot of inflows into equities, particularly in the second half of january. we don't know the impacts of a rigged -- our rhythmic style trading which features more and more in markets. the fundamentals really haven't changed. anna: you haven't changed your

views. where do you see the opportunities? we have not changed our views. we are still looking at good returns. we are looking at all major regions was slightly different drivers. when we are focused on his businesses reporting healthy profits. banks benefit from greater inflation. sectors like technology. actually, when you screen on a valuation, it's looking cheap. the ceo is saying he would welcome higher interest rates. manus: the bomb -- the bond

market is the great protagonist of his current unease. it's interesting that the unease and equities was explosive. but the volatility in the bond market never quite managed to those heights. as you look at the bond markets and the fed, and that is where the market has to decide. where the current market is set or is it shaken? >> three is the number we are going for as well. that has not changed. we think three to four rather .han two to three we think it's a relatively safe pair of hands in the transition. markets, if they are in a nervous frame of mind, might want to hear some words of comfort from the central banker. >> i think central bankers have

been plenty good about delivering quite transparent messages. i think that will continue. the market will continue to watch the data and specifically the inflation data. it's the root cause of what started the cell back. anna: she will stay with us here. manus: asian equities, we told you, rebound visits. -- well, european futures are pointing towards a slightly higher opening and u.s. equity futures, they are still dipping into the red. europe set for a turnaround, there's a lot of words around here. it will talk about those moves. this is bloomberg. ♪

♪ bloomberg.is

let's get a business flash. steve wynn has stepped down as ceo and chairman of wynn resorts after being embroiled in a sexual-harassment scandal. it's board reluctantly accepted winds admit -- resignation. profit beat expectations in the fourth quarter as it managed to take it vantage of crude's recovery. it was a profit of one point $3 billion after a loss of 40 million a year ago. it comes after a bruising three-year downturn. at 7:30 a.m..us softbank has recorded third-quarter profits that fell short of estimates.

operating profit was two and a half billion dollars after an increase in cost for user acquisition. that's your bloomberg business flash. manus: thank you very much. grace peters is still with anna and i. the bottom line is that the u.s. looks through the hurly-burly, tries to look through the volatility spikes. we have earnings analysis. you can change it to any index you want. this talks about growth. you have been rewarded, you have been battered and bruised, share buybacks, dividends aplenty. what does the analysis tell you? >> it's been a good earnings season, particularly for the u.s..

plenty of things coming through in the mid to high single-digit level. cyclical sectors are doing particularly well as that synchronize growth comes through to benefit corporate profits. inflation is what started the selloff at the end of last week. oil and gas, commodities, are doing well. not just at the fourth quarter numbers but also 2018, that message is also strong. tax reform is one of things we watched from a fundamental perspective. 4909 on the bloomberg. this is the rate at which people feel comfortable leaving jobs. number of people walking away from jobs made a 17 year high. that may tell you something about people's confidence in the u.s. economy.

there are probably also some forctural trends in their people leaving existing jobs to do something more entrepreneurial. that can be one of the impacts on technology and society in the way we work. home morean work from easily in the past. manus: i dream of that. when the alarm goes off, i dream of what is the app. sachs, as ian tyler said $60e, he was talking about $70 oil. their bullish to beat the band. they said robert year is would do well. do you agree? can we set you up? >> we are more in line.

that in athe idea rising inflationary environment, oil does well. we are looking at more detail now because it's been an underperformer. given where we are in the cycle feels slightly anomalous. thank you so much for your time. continuing on bloomberg radio. quick check of the markets? european stock futures, with a 10 year yield in there as well. up're looking at euro stock a little bit. will that last? the thing to look at is s&p futures are pointing down. "european for date --

open." this is bloomberg. ♪

♪ guy: good morning. i'm guy johnson. i'm alongside matt miller who is in frankfurt. than 15 --g is less 30 minutes away. ♪ guy: market with flash after a seesaw session yesterday in the u.s.. markets in asia fated to the close. european markets looking to react positively. u.s. futures looking negative.