charges you will see a lot of that relates to properties. particularly head office buildings we are in today. anna: good morning from a lot relates to legacy technology costs. there is also some of that bloomberg's new european headquarters in the city of london. relating to things like brexit i am nejra cehic. planning. from berlin, i am matt miller. will there be more branch nejra: round two asian stocks closures? ewen: i think -- powell'sore jerome second appearance this week. will the fed chairman strike a we all going to be public if we more balanced tone? shut branches. we will talk publicly about it. nejra: that was yuan stephenson matt: trade tensions, president trump is ready to slap tariffs on steel and aluminum imports. speaking to me yesterday. antagonizing trade partners -- ewen stephenson. including to china. peril amid widening round two, jerome powell disagreement. goes back to the capital.

single -- signals it caused a commotion in stocks. more job cuts. we will see what he does for us today. plus, tariffs, data, and politics. china's hot moment wraps investors attention. ♪ we will discuss the future of the world's second-largest economy. let's get you some this is bloomberg. ♪ breaking news coming across the bloomberg now. we have numbers, what is coming through is the for your dividends are shared coming in at 2.5 swiss francs. also announcing 150 million euros share buyback. this is a recruitment company, a deco. -- adecco. let me give you these numbers here. we have fourth-quarter adjusted, rising 21%. the estimate was for a gain of 16%.

104 on eps adjusted. 1.02, oration was for $1.02, according to our survey of analysts. ab inbev beating the figure for the fourth quarter. dividend per share will be two cents. that is in line as expected. revenue rose, sales rose more than had been anticipated, up 8.2%, and we were only looking for a gain of 5.3%. posting better than expected results as far as its fourth quarter earnings. the risk radar has been a tumultuous day across the globe for trading. obviously, february was rough. the worst month for stocks we have seen in two years.

yesterday did not start off well. today did not start off well overnight in asia. yesterday was rough for u.s. indexes. topics down 1.6%. x down 1.6%. are still down from the four-year high we hit last week. 2.95%. at 61.61.olding you will want to watch the new york contract today. nymex crude has come down quite a ways. after about inventories number it is holding at $61.60 per barrel. the 10 yearhowed treasury yield, and it has come high.rom 2.9 for -- 2.95% despite the treasury yields are seeing, we still

some decline in u.s. stocks. we have had a today's selloff with stocks declining over the last two days. this chart is showing breadth. this is concerning investors. the decliners in the s&p 500 have been out pacing the advances. this point, we have had the s&p 500 post its worst month in ♪ february since 2016. matt: good morning. let's get the bluebird first it is 7:20 a.m. here in berlin. word news with juliette saly. juliette: u.s. president donald 6:20 a.m. in london. trump is set to announce state tariffs on steel and aluminum 2:20 p.m. in singapore. downop -- the topix was imports today. according to people familiar with the matter, he wants to announce tariffs of wi-fi 5% on steel, and 10% on aluminum from 1.5%. so was the nikkei. all countries. it would be one of trumps only the csi 300 keeping its toughest actions yet. head above water in asia.

it risks antagonizing friends and foes alike. more than 38th two donald trump equity indexes are awaiting jay powell's testimony in front of the senate. let's get the bloomberg's nest/. have been stripped of access to has filed forify top-secret intelligence, according to two people familiar with the move. the aides have been notified they will be downgraded security a direct listing on the new york stock exchange, as it forgoes a traditional ipo. clearances. the largest paid music streaming service listed its shares, it's white house communications director hope hicks is stepping offering is not being on written down. this came a day after she testified in front of a house intelligence panel, in which she by an investment bank. walmart has pledged to increase said she tells white lies. its firearms and ammunition purchasing age to 21. the retail giant joined dix -- deutsche bank has been asked to provide information about the relationship with jared kushner. dick's sporting goods. stops said it would according to people familiar with the matter, the state department spent -- sent letters to the german lender last week. selling rifles like the one used in the parkland massacre. that is your bloomberg business flash. much thank you very kushner's business ties have come under scrutiny. juliette saly in singapore. the chair jay powell is due back the u.k. prime minister is set to meet european council on capitol hill where he will

address the senate banking committee. president in london later. the testimony follows a revision down of u.s. gdp to 2.5%. it comes a day after theresa may vowed she would never accept a draft brexit agreement from the the original match estimates. with some hard data behind them, european union that race prospects that the exit is will powell follow up on his hawkish tone of a week earlier, heading for a breakdown. europe faces a second blast of cold air that will linger into and do markets welcome that? thank you for joining us this march, as it gets over a deadly morning. front from siberia. what do you expect from jay it is causing chaos from britain to italy. surged.rices powell in washington dc today? is he going to spook the markets the way he did on tuesday? i don't really expect that. u.k. gas prices have already doubled to their highest in more than a decade in this week's i think what spooked the markets deep freeze, which dropped heavy was that he sounds different to snow, halted traffic, and what we have heard, not as disrupted flights across the more confident in a region. global news, 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries. way. i think that will continue. you can find more stories on the bloomberg at top . that very was the worst month

for global stocks, asian stocks nejra: is there a risk we read as well. we have not started march on a strong footing. too much into what he is saying? the nikkei closing out the session lower. the fed is a consensus, so while people were reading the hawkish in hongseeing weakness tone that may have to do with him? different,does sound kong, south korea, and thailand, closed for the holidays. the upside is in the chinese market. but when you look at the ondid have a positive read messaging, it was very much the same that we have heard before. , but the see too much the manufacturing gauge. aussie market and the aussie confirmation we will continue on the rate hike part, and there is dollar falling after disappointing data today. not more dovishness coming in. fact that trump could impose whether there is more hawkishness, i did not see that. economyes the u.s. aluminum and steel tariffs, you are seeing a big drop in these material players. justify it? let me put it this way. will the economy be fine with three rate hikes this year? oil in sydney closing by 4.5% lower. the earthquake in papua new guinea may hold its productions. you expect a big increase in earnings from corporate america? increase inpect an --are seeing corporate earnings, but perhaps not as much as currently priced in. i think the u.s. as it is going

juliette saly in at the moment can live with three rate hikes. if itl all depend on singapore. we just heard the results, adecco has announced a 115 continues. what we are seeing is a turning over of expectations of data flow. million euros share buyback. it is not turning negative, it ceo.us is adecco's is just not increasing the rate of growth anymore. nejra: what does that mean for the 10 year yield? how wassk you first, lothar: i do think we will hit 3%, but as long as we do not run the performance across the region? revenue met estimates, away into 3.5% to 4%, it should >> first of all, we are pleased not be a problem. the economy is running where it is sustainable. with the acceleration of the the question will be more on growth we had in the fourth quarter. individual stocks. what does the increase mean to those firms? when we look at the growth, we perhaps they have overextended themselves on the debt side. matt: you were not concerned on are very happy with that. your,owth was driven by a larger and more general sense, we have reached the end of the cycle and we will turnaround especially france, italy, iberia anytime soon? lothar: no. .

broad-based growth. if we get a policy ever, it could stop the cycle. also more limited growth in the u.s., but europe is in recovery. cyclesellen said before do not die of old age. we also see strong growth in at the moment we are running at a very nice tech. sentiment coming recruitment, which is a good sign for the global economy. all, a very positive from the business world. there is no reason to believe there is a downturn on the horizon. revenue momentum. capital markets, different story. we are entering a different era of monetary tightening, coming matt: what used the as far as back from quantitative easing, the -- what do you see as far as and that will be difficult for capital markets. expect more volatility. the u.s. this year? how does that affect your bottom line? : the point you have nejra: there is not enough inadth enough at the moment already seen in the media that some companies will start to create new activity, especially the s&p 500. does the lack of breadth show create jobs. that we are in store for another correction? lothar: i think another apple creating 20,000 jobs in the u.s., and i expect more correction is entirely possible. companies to come with such we have exited the era of low

news. you havejob creation volatility. it also tells me there is more scrutiny by investors from in the u.s., the better it will different companies. be for us being on the temporary stockpicking may come back. staffing activities, and also still exciting and interesting, for the permanent recruitment. but stock ticking may have its come back. what you do to jobs creation is always good for us. nejra: you expect europe to lead protect your money? the growth in the coming year areout the stocks that because of where europe is in weakened by ones that are stronger in the u.s.? the business cycle compared to the u.s.? we have relocated in our it is clear that europe ,as been late in the recovery allocation back to active funds. yes, we are putting our money where our mouth is. and especially some economies we are also a little more like france were very late in careful about our equity exposure. the recovery. we have reduced our equity when we look at all the figures, exposure, and crucially we are we see numerous countries are perhaps a little against ak of below the previous pe consensus expecting dollar strength going forward rather than dollar weakness, which should probably also become a 2007. we expected this recovery to go problem for emerging markets. nejra: we will talk more on, and there is new momentum to

emerging markets later. go further on. lothar mentel, ceo, tatton what about the cycle? investment management stays with us. the u.k. prime minister is pushed onto her back foot. was at the private equity this is bloomberg. conference and a lot of people ♪ were saying when this cycle ends, and it is due to come to an end soon, we have to be ready. do you see that in certain economies? you see it getting to the end? with the visibility we had today, we do not see any sign of recession coming. if you look at all the macro figures, they are positive everywhere in the world. in the u.s., in asia, or for sure in europe. figures from more ,han 60 countries in the world nowhere in the world you see a disruption in the pattern, or customers using us or the

flexibility, the recruitment we are providing. i would say on the contrary, , we you look at all figures have figures in the low single digits. company's are restructuring less, which is assigned a good economic health. matt: what is your experience with the inter-trade cycle? when interest rates start to go up, how does that affect adecco? that, ihe point is inflation, because thanks to inflation, all revenues are growing. at this stage, we see inflation wage

see the u.s., we the same pattern in germany and switzerland. inflation today is limited to 2.4%. adecco has sacrificed margin to long-term growth. when will the benefits the scene in the bottom line? announced to our investors, we are willing to perform because we have a strong profitability. we want this profitability at the level we had.

the leverage we are getting because of the growth is being reinvested in the transformation of the company. also in innovation. we recently announced initiatives in the digital factors -- digital sectors. ♪ we have announced the creation nejra: it is 6:30 here in of an online digital staffing. london. it you are looking at a live shot of the emperor's palace in in less than 10 months we are in tokyo. the bloomberg dollar index two countries. overall holding on to gains. announced anhave we got breaking news. the peugeot numbers are acquisition in the digital area, aonal recruitment coming out. the company is closing a dividend of $.53 per share.

company based in new york, which they are confident in completing is a leading company startup in their 2020 pace plan. the professional digital arearecruitment, which is a hue zhou bought opal from general market. it is a 25 billion euro market. motors. -- peugeot bought opal from huge -- it is a general motors. huge opportunity to into this market. nejra: thank you so much to prepare for that. alain dehaze, ceo, adecco. it is competent in cutting costs. it seems to be moving forward further job cuts are inevitable, with that. from the german perspective, it this comes as britain's biggest has been a difficult story with lender accelerates its opal even after the takeover by investment in technology. peugeot. the comments were made yesterday. >>within those restructuring it is difficult for german factory workers who have been laid off. the company has a recurring margin, automotive margin of 5.9%, including opal. automakers globally look for is to get closer to 10% on these margins. it does not happen often.

oris like u.s. truck makers luxury sports car makers like porsche that are able to do that. you want to get closer to 10. is at 5.9%.ugeot let's check on the markets after a rough night in asia, a rough day in the u.s. yesterday. we go to emory in london. -- we go to anne-marie in london. is one of the wildest months we have seen in record in years. in asia, a mixed bag. a key manufacturing gain came in better than expected. materials and industrials getting hit the hardest. jerome story is again powell fed chairman back on the hill. today he is talking to the senate banking committee.

that is what the markets will be focusing on today. the nikkei, volatility is back. is saying it has attracted money to japanese shares. now we are seeing japanese stocks lower for the first time since june of 2016. volatility concerns are back. japan lower today. one analyst is talking about volatility creeping back into the market. we thought it was over, but possibly not. let's check in on oil. wti sub $60 per barrel. brent, under $65. stockpiles rose to the highest since november. gasoline reserve expanded at a four times the predicted rate.

huge u.s. growth coming out of there. we have the opec secretary-general going to texas. he will meet with american oil executives for dinner on monday night. the shale side and opec is trying to clear the glut. we have u.s. inventories on the rise. nejra: the first decline in oil in six months. the scotland chief financial officer says further job cuts are inevitable, this comes as written's biggest lender accelerates its investment in technology. it relatesnson says to the disposal of property. said we willways talk publicly about job cuts. i think it is inevitable. we are not going to talk figures. within those restructuring charges, you will see a lot of

that relates to properties. typically the office buildings we are in. a lot relates to legacy technology costs, like data centers we are planning to get out of. there is also some of it relating to things like brexit planning. will talk more about brexit shortly. will there be mark branch closures? we are comfortable with the branch network as we had announced it. public, if weery are going to shut branches we will give six-month notices. nejra: let's talk about the brexit. if they do not reach a deal by the end of march, what are your contingency plans? >> we are doing all the sensible contingency plans you would expect us to do. previously about the subsidiary in amsterdam, so we are continuing to progress those plans. we have a big bank in ireland,

so the issue of the republic of ireland border is important to us. we are concerned about the impact to our customers. a lot of smaller mid-cap companies are underprepared. nejra: how many people might you move out of london in the event of no transitional deal? >> we talked publicly about needing 100 50 people in our dutch operation. some of those will come locally, some will be transferred from london. we are taking that pays as low as we can until we understand what the transitional arrangements are. nejra: would you move them all in one go or increments? >> it would be a slow movement of people overtime. nejra: still no updates on the u.s. department of justice probe . you expect to settle that? timing.ve no update on

we would like to get it settled and resolves. i have nothing further to say at this point. nejra: could it be in the first half for the second half? >> a year ago, i would've expected it to be last year. we are not making predictions when it will be settled. nejra: you have said you may take further provisions as discussions with the doj beyond -- remain beyond your control. ofit depends on the nature the discussions we have with the doj. appropriate tois take additional provisions. nejra: what would be a worse case in reo? -- worst-case some mario? case scenario? >> we can continue to run long capital and liquidity. onra: the dividend depends

the settlement of the doj probe. when is the earliest the dividend can be reinstated? >> we need to get resolved with the doj. once that is resolved we can quickly get back into a discussion on dividends. nejra: 2019 likely? >> we don't want to make productions but we want to stop paying dividends. theresa may's brexit troubles are deepening as she prepares to meet european council president in london later on. it comes a day after the u.k. prime minister vowed she would never accept a draft agreement that was published by the european union. the document proposes keeping northern ireland in europe custom division. it would maintain the integrity of britain's constitution.

every day we get a new story on brexit. none of it seems to move the needle much in terms of what we know for certain will be the outcome in 2019. how does it in how -- how does it affect your investment strategy? lothar: at the moment you have with careful and mindful allocations around the u.k. i am surprised we are underweight on u.k. equities. whether it is inevitable that the exit will happen in 2019, i think they are currently trying to test that a little bit between brussels and london. and maybe we have entered the stage of provocation on each other since there did not seem to be much moved in terms of what each side was offering or want during -- or wanting.

we are trying to find out what it takes to keep britain in the eu. nejra: according to people familiar with the matter that bloomberg has spoken to, eu officials were fairly sure that the draft brexit deal would be unacceptable to theresa may, because they want the u.k. to .tay as close as possible do you buy that? and what does it mean? lothar: i do buy that. i think they are going down the wrong route. aroundnt to turn opinion , adopt eu framework. that might be a more important first step forward. what does that mean for the pound? it makes it difficult to foresee , as if we get a breakthrough or some unexpected movement suddenly, then the pound could make a strong move upwards. at the moment, i think that is quite a while to happen.

companies you look at in the u.k., especially on the ftse 100, are you concerned about brexit at all, or do these companies really operate outside of that whole conversation? it depends at what you are looking at, but the ftse 100 comprises very international companies, and they will cope. it is not a great state to be in for the u.k. because it undermines investment and business sentiment. we could do with more as we see in the rest of the world. u.k. is running a bit behind. it is benefiting from the global .pswing and exports are growing the weaker sterling is helping with that. we could have a stronger upswing if there was not that concerned about what investors may pay back.

i am not concerned about domestic companies then i am the international ones. nejra: does the bank of england's approach risk the economy at all, and the repricing we have seen in markets with regard to rate hikes? lothar: i think it is interesting to see the transformation we have witnessed with the bank of england. are inclined to think they telling the politicians, look, we are not going to bail you out on this. you have to make some progress yourself. we are not going to help you with accommodative monetary policy. that is a warning shot to the government to say, you need to get on with this. expect at theyou end of all of this? you intimated that you do not see an exit in march of 2019. do you think we will be in some drawnout transition period? lothar: that is exactly what i

am expecting. brexit probably get a unless there is another referendum because of some movements on the eu side, which i am not really expecting. i think we will get something, but we will get a lot of transition periods because otherwise it will be too painful for the u.k.. we are the biggest trading partners to each other. we need to tread carefully here. that will be the case, but it will be through a long transition period. will stayhar mentel with us. president trump wants to impose the harshest tariff on steel and aluminum imports. this may provoke retaliation from china, which has already launched a probe into u.s. imports. a two-week session starting on monday, the parliament is toecting legislative changes

allow xi jinping to rule indefinitely. this will give them greater controls over money and power. expect any kind of retaliation on trade from china? china certainly warned that they are willing to retaliate if the u.s. take steps to aggravate them. they have launched an investigation. they are the biggest importer of soybeans. want to go part on u.s. goods or china investment in the u.s., they could. we are not at that stage yet. bigl and aluminum is a headline, but overall, chinese exports of steel to the u.s. is a small volume of total u.s. steel imports. the timing is significant, as the top economic adviser to xi jinping is in washington.

it is something of a warning sign to him. the u.s. is willing to push ahead with these trade tariffs. ratcheting up of tensions. we are not quite into trade war territory, but it is a warning that things are getting more tense rather than better. matt: from the chinese point of of view,m xi's point what does the relationship look like, and is he willing to change it? >> the fact that they have sent over there top economic advisor at a time when they had important meetings going on in china is an indication that china is worried. they are nervous about the direction of u.s. trade policy. u.s. that ist the critical when it comes to china. there are plenty of others complaining. nervousand, china is about the direction the u.s. is headed, and on the other they're

trying to placate mr. trump somewhat. the want to make in all of branch offer. an oliveant to make branch offer. jinping would like to keep the u.s. and china relationship on an even keel. they would like to deep use these trade relations. it is more suited to china's economy. i doubt he wants to aggravate things worse than they are here. nejra: thank you so much. coming up, we will talk russia as president putin plans to lay out plans for his latest campaign in a speech to the nation today. irish banks ceo joins us for an exclusive interview after 7:00 a.m. u.k. time. this is bloomberg. ♪

♪ good morning.

welcome back to "bloomberg daybreak: europe," our flagship morning show. it is 6:49 in london. 1:49 in new york. you are seeing the empire state building lit up green and blue for international -- it was a rough day in new york yesterday. we will see what happens today ahead of jay powell's testimony in the senate. russian president vladimir putin will give his annual state of the nation speech later today. the kremlin is looking into measures to boost economic recovery, as discontent with stagnant living standards is mounting. anticorruption campaign foundation executive director talked about the issues putin faces any upcoming presidential election. he spoke to bloomberg. arehere are challenges that

quite hard for him to address. happy becauseot the economic pie is shrinking. there is less money for the entrepreneurs. there is less money for the corrupt bureaucrats. the population is also not happy. so, he is not getting any younger. i think it will be a challenging six years. it is likely that a change in the political system in russia will come even before the next presidential election. >> he will appoint someone -- >> it is quite possible. yeltsin appointed someone in his place in 1999. >> do you think putin will do what xi jinping did in china so that he can run beyond 2024? is a good question. i think it is definitely possible.

putin likes to have options. he probably has a folder in his office which says, how do i stay in power? is amoryining us now with the latest. what can we expect from the state of the nation speech tonight? >> it is usually delivered earlier in the year, but it was pushed back. his spokesperson announces all of his functions. it is about his campaign. he will focus on domestic and foreign issues. the messick we, there are talks that the government might open up the fiscal tax. spending money on infrastructure, highways, roads, as well as education and health. saying, stagnant living wages is one of the biggest issues. people are us -- people are upset about that.

to put more money into the economy. was surprised russia hasn't anticorruption foundation. how strong is vladimir putin's grip on the political environment in russia? really ispposition there in the country? is there any way he loses power? way that he is going to lose this election. this anticorruption campaign, the individual i spoke to actually fled russia. he is seeking asylum here in the u.k. he even said the opposition does not have a chance of winning, but the fact that they are there, they have had protests around the country, the opposition leader does not have a chance. he is not even on the ballot. he has been barred from the election.

it is likely he will be in jail on the day of the election. there is no chance that this election does not come down to putin. what this election is about, and the next six years are about, is what happens after putin? inism withoutep put vladamir putin? lothar mentel, ceo, tatton investment management is still with us. we are looking at equities. we have made a lot of money in the emerging-market equities. we are reducing that now, because emerging markets have , but a lot ofn future returns are hinging on the dollar. on the dollar, we are expecting a bit of strength. with strength, emerging markets have suffered. of a linkyou see much

between dollar strengthened emerging markets? it used to be very much a around debt. it is not the debt anymore. it is the price of the higher dollar has now recently brought down a global activity levels. if we get strength in the dollar, that is what we would expect again. much do you think the weighs onw ways -- investment decisions? lothar: it does quite a lot. that is indeed why in our own investment management have focused more on bsg. esg. not just being ethically inclined, but the governance is hugely important. therefore, we are in emerging

markets much keener to go with active managers who look at that aspect strongly. nejra: s&p recently upgraded russia. it has pulled back a bit. is that meaningful for your investment decisions? ithar: not normally, but needs to be recognize that russia is doing better now that the oil price is so much higher. that headwind has gone away. that obviously is a good thing for russia. matt: coming up, allied irish bank joins us for exclusive a.m. u.k.after 7:00 time. that is when you do not want to miss. this is bloomberg.

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>> these are today's top stories. matt: asia stocks follow the u.s. lower below -- before jerome powell's second capitol hill appearance. will the fed chairman strike a more balanced tone? steel imports and

antagonizing trade partners including china. matt: the u.k. primera -- minister meets donald tusk in london today. amid widening disagreements. u.k. inc. rbs signals more job cuts. we speak to the cfo. >> it is inevitable there will be further job cuts but we are not going to talk publicly about figures. nejra: we just got the equity futures opening up in europe and after two days of declines of more than 1% and weakness in asia we could see europe open lower. euro stoxx 50 futures are down .4 of 1%. and ftse futures tracking lower.

dax futures also lower by .41% and cac 40 futures are lower. we could see some broad-based losses in europe when we open which would be the third day of losses for the stocks -- stoxx 600. matt: let's abet the risk radar. the drops we have seen and have seen overnight in asia because of concern about powell's testimony and because of what we saw happen in the u.s., the topi x is down. 2.95% and change before turning around. we have not seen much movement here but it did on tuesday with his congressional testimony jumped for a moment. we will see what happens today. nymex crude up .1 of 1% taking a 'ig drop after the inventories numbers went the same way.

oil still at 61.73 a barrel. nejra: cash markets opening up in the bond -- and the bond markets. and futures moving higher same as well for the french futures. you're looking at u.s. bond futures, we told you that the 10 year yield is steady in the session at 2.86 percent. it will be interesting to see with the gilt market does. 1.5%0-year gilts yield hit . overall it looks like we could see yields coming down a little and european bond markets. are seeingow, we some movement in the cash market. the 10-year bund yield is up a .asis points -- matt: the -- routers is saying full-year adjusted pretax profit

were more than 800 million pounds sterling. charters beating on the pretax level. the dividend per share will be 113 pence. wasfull-year adjusted eps 222 point four pence. the estimate was for 210. beating even the top of the range, we're looking at a range of 204 to 217. streets beating the easily. look for schroders to move. this is a payout ratio in tda, with full adjusted ebi a slight miss on the estimate of 2.5 5 billion pounds. to 2018.g a slow start comparable sales flat, full-year

revenue up 6.1% to 15.2 7 billion pounds. the estimate was for 14.7, a bit of a beach on that number on that full-year revenue number. full-year headline eps coming in at 120.4. 3.9% above estimates. break a small to acquisition, adventure will -- will buy laird. closing yesterday at 115 point nine pence. they will almost double the closing price yesterday. it will be one billion british pounds. watch for that stock clearly to move at the open, down 10% over the last 12 months. let's get the bloomberg first word news.

for the -- that we go to juliette saly. president donald trump is announcing tariffs on steel and aluminum imports. he wants to announce tariffs of point percent on steel and 10% on aluminum from all countries. it would be one of trumps toughest actions yet to implement a hawkish trade agenda that risks antagonizing friends and foes alike. to presidentaides trump have been stripped of access to top secret intelligence. according to two people familiar with the move officials have been notified that they will be downgraded to lower level of security clearances. white house can indications director hope hicks is stepping down. her departure came a day after she testified before the house intelligence panel telling them her job required her to tell "white lies." asking deutsche bank and two local lenders to provide information about their

relationship with jared kushner, his family, and the kushner companies. according to people familiar, the state department financial services said letters -- sends letters to the lender last week. kushner's ties have come under scrutiny in light of his broad portfolio a senior advisor to his father-in-law, donald trump. the u.k. prime minister is set in londonnald tusk later coming a day after theresa may vowed she would never accept a draft brexit agreement that was published by the european union. the race the prospects that negotiations over britain's exit from the block are headed for breakdown. europe faces a second blast of cold air that will linger into march just as it gets over a deadly front from siberia causing chaos from britain to it or leave -- italy. is keepingwave temperatures in normal -- in

europe below normal. gas prices have doubled to the highest in more than a decade during the phrase which wrapped heavy snow and disrupted flights across the region. demand for fine arts is not anything new but one international art it pfizer he firm has been on it picasso spending spree dropping 155 million dollars on 13 works in two days. they bought the -- nine of them the previous day at christie's. house is keeping mum. 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 . a third session of losses and asia. we saw the nikkei close lower by 1.6%. in thailand closed, south

korea and thailand but you have seen a pickup coming through in the csi 300, the large-cap stocks moving the highest with a little bit of upside coming through in hong kong in late trade. we had a positive read on the manufacturing gauge. of stocks we have been watching the aluminum and steel players. to the upside a couple of stocks that have done well today, japan airlines up over 4% in the tokyo session on an announcement of 7 million shares in a share buyback. we have seen some movement coming through in some of the apple players as well. 5.5%. this is on prospects for its new smartphones camera. overall of players but it has been another day of selling.

of selling and asia. it looks like the european equity markets could open lower -- 50l in 15 minutes time minutes time. futures are pointing lower and we could see broad-based losses. earlier you were saying the 10 year treasury yield could get to 3% and everyone is questioning what that means for equities. you said we could see another correction in u.s. equities. where does the 10 year yield have to get to for you to start to reassess your portfolio? get a it would have to lot higher. we are equity underweight slightly. if it got a lot higher behind 3.5 we would reassess that. i do not expect that. i think we will pretty much stop it three because the markets are economy is not accelerating any further. pretty goodng into

growth. we are not seeing a further acceleration. that will stop the inflationary pressures and the pressure in the yield. matt: when you look at paul attila the, that seems to take the market by surprise. i saw warnings from you a few months back but i am going to show this chart, the vixen sugary, we see this massive jump from almost no movement in the preceding monster of the year. do you expect volatility to remain elevated this year? guest: yes. i think it is not going to be much different to what we have had historically. we have to recognize that what we had over the previous 18 months was perhaps not quite as normal and was probably also a result of certain products that have skewed the market, the volatility markets.

let me take you to one of my charts. what this shows is dividend yield over bond yields comparing the s&p 500 with the stoxx 600 and the topix. it looks like european equities, out on top. would you prefer europe over the u.s.? prefer europe over the u.s. although we are in a difficult situation because of ae -- we are expecting stronger dollar. that makes u.s. securities somewhat more attractive. overall, we would look at the andomic outward momentum that is still stronger in europe, europe is running a couple of years behind. there is more upside potential from our perspective. matt: what are the industrial groups that you like, what are the companies that you want to

get into in europe? on whetherill depend it is more the domestic demand or international demand. it hinges on the dollar. if the dollar goes a lot higher, we would be more focusing on domestic companies in europe. if the dollar stays where it is, we would continue to look for the exporters. you: really appreciate joining us this morning. -- of caps on investment tatton investment. this is bloomberg. ♪

nejra: it is 7:16 a.m. in

london. we are 45 minutes away from the equity market open. let's get a check on the markets. we could see the equity market open lower judging by the euro stoxx 50 futures pointing lower by wait for a 1%. we could see some rod-based losses. in terms of the bond market, it is more quiet. the 10 year bond yield unchanged. tracking what is happening with the 10 year treasury yield which is also unchanged at 2.8 7%. after two days of losses of more the 1% on the s&p 500 and worst month since 2016 in february, we could see some modest gains at the open judging by the u.s. futures. let's get the bloomberg business flash with juliette saly. juliette: spotify has filed for a direct listing on the new york stock exchange as it forgoes a traditional ipo. the world's largest paid streaming service plans to lease shares under the single sp o.t.. it is not being underwritten by an investment bank. walmart has pledged to increase its firearms and ammunition purchasing age to 21. that is as the retail giant

joined texas sporting goods that said he would do the same. it would stop selling assault rifles like that when used in the parkland massacre. walmart stopped selling them in 2015 citing slow sales. qualcomm is drawing the attention of it -- a secretive u.s. panel that reviews where the acquisitions of american countries raise national security concerns. to two people familiar, the committee on foreign investment is split on whether to involve radcom's effort to win control of its rival. another review would add a hurdle. royal bank of scotland's chief financial officer has signaled as itr job cuts accelerates its investment in technology. he did not give a target for potential job reductions at the company which shut 259 branches in december as customers

increasingly access their accounts online. >> we are not going to talk about -- openly about figures. within those restructuring charges, you will see a lot of getting out of properties and office buildings we are in today. a lot of it relates to some legacy technology costs like data centers we are planning to get out of. there is some of that relating to things like planning. einhorn'sdavid [indiscernible] percent. losses to 2.3 that is according to a client update. the s&p 500 lost 7% in sugary including reinvested dividends pairing the gains to 1.8%. -- globalhedge fund hedge fund index dropped 2% in

the latest month. not immediately respond to a request for comment on the results. that is your bloomberg business flash. thanks very much. juliette saly in singapore. allied irish banks reported adjusted full-year profit a for cash of 1.6 billion euros and proposed a 30% increase in its dividend saying that a positive start to 2018. joining us from dublin for his first full year earnings report since the ipo is the ceo of allied irish banks. thanks for joining us. weree ask you about there positive results from your bank including the 1.6 billion we mentioned. you still have a startling number of nonperforming loans,

60% of the total balance sheet, more than 10 billion euros. what are you doing to get those down, how quickly can you have them reduced to a sustainable level? for the thank you opportunity to talk to you. the performance is strong. one of the items in that performance is we generate a lot of capital. we have brought down the nonperforming loans as you mentioned. in 2013, we had 29 billion in nonperforming loans at the end of 2017. we are working through them effectively and we have a team of 1500 people who work with customers on individual case restructurings. a veryw is that we have effective mechanism for dealing with customers. the economy is doing well which is supportive of individuals with more earnings and housing prices are rising. when you look at the other

aspect, there is nonperforming exposure. we have done the restructurings with 2.4 billion of that number already and what is happening is probationto work out and our experience is positive. a lot of things taking place but the balance sheet normalizing quickly and the performance coming through in terms of that capital generation. thea: want to ask about margin which is ahead of your target of 2.4%. by loan growth, particularly 's? bernard: we gave it medium targets. what guidance we gave on the net interest margin was we were comfortable that it would be in excess of 240. we did not used to 40 is a target. we felt the net interest margin would be in excess of that and

that is where we have maintained our position. during the three years and proceeding this, we reduced interest rates quite a bit for our mortgage customers, a 130 basis reduction giving us a low rate in the market. it is a question of keeping the balance right between the positive and strong interest net margin and a rate that is attractive to customers and .assing on costs it is a mix of good asset growth and strong yields and earnings on the asset side but an improvement on the liability side. eu hosting itse position paper on brexit. they want to keep northern ireland inside the single market. what effect has brexit had on your bank so far and what effect do you expect brexit to have on your bank going forward? renard: today, the main effect

has been a currency effect moving sterling versus the euro. that has had modest impact on the irish economy or individual industries and that economy. the customs union issue is a more difficult issue and more substantial. the position of the eu is the bottom line position established that this agreement was in place. we will wait and see where it works out. where working with our customers individually and collectively across the industry's to make sure we support them so they can invest to be more efficient to position themselves for the change. come.ment of change will some of them positive and negative for the irish economy. we continue to see strong growth but fully recognize that some sectors will have more to do to position for the loss of a large export market. matt: there has been a lot of talk about a hard order going up

between the republic of ireland and northern ireland and the position paper going the other way. do you want to see for your island? bernard: i tend to leave politics to the politicians. they are having enough enjoyment on this topic. a practical solution can be obtained and that will allow all of the core interests to be observed. everyone feels that the success of the northern irish peace process is one of the key achievements of the eu. in alignment with our positions but the devil is in the details. we will have to see how that works out. you have the project redwood loan portfolio for sale. should we expect more sales this year?

is asd: what we have said we work through our loan portfolio, did -- the distressed we have saido, that for certain commercial portfolios, we will consider disposal of deeply distressed portfolios and deeply in arrears portfolios. we have had low levels of engagement. we do not have a pdh portfolio for sale and we do not need one to get to our target. can investors expect a special dividend soon? bernard: an increase of 30% which got us from a payout ratio of 25% last year to 33% this year. backend of ourhe target range. we would hope to be paying close 50% toeuropean norm a

60%. that will position us for special dividends that link to the surplus capital. we have 17.5 which is high. we see that taking to the back end of that time. matt: thank you for your time. the ceo of allied irish banks. we will talk about china. it says it will take measures to safeguard its interests. mom you called?

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guy: good morning. welcome to bloomberg markets. this is the european open. i am guy johnson at berkeley london headquarters. matt miller is in berlin. cash trade less than 30 minutes away. ♪ guy: stocks selloff into an ugly u.s. close.

tokyo finishing in the red. european futures are pointing south across the board. challengings howells hawkish tone? the new fed chair is back on the ll