>> good morning from bloomberg's european headquarters in the city of london. i am anna edwards. matt: and i am matt miller from berlin. this is "bloomberg daybreak: europe." manus: where is trumps -- russiae is trumps redline? the white house denies that the president is preparing to fire his national security adviser. matt: russia's election. vladimir putin runs for his fourth term as president as tensions rise between the kremlin and the west. we are live in moscow. >> eu diplomats say that the u.k. has significant work to do on the iris -- irish issue

before next week's summit. ♪ anna: welcome to the program, everybody. this is "bloomberg daybreak: europe." 6:00 in london. let's talk about the asian session. -- cac iss in limbo in limbo. spokespeople denying that they are about to remove h.r. mcmaster as national security advisor. there was a little bit of money going into the yen. there are some signs that this kind of ongoing political turmoil and concern around tariffs and protectionism is having an impact on risk aversion. year have a look at the 10

yield. 2.82% is where we are at right now. it is useful to remind ourselves how far we have come from those highs in february. certainly some of our colleagues on the mliv talking about a new trading range for the u.s. 10 year. futures pretty flat for the u.s. equity session, i should say. we continue to watch the dollar against the yen because of risk aversion and also because of the ongoing scandal that seems to be an golfing the political establishment in japan. some suggesting we need to watch the popularity polls over the weekend, and that could be something that will be critical as to where the story goes next. how long will the global expansion last? matt: good morning.

you know, that is a question that jpmorgan is point with as toying with as- well. that investors reconsider. take a look at this chart. what this shows you is the odds of a recession from a survey over the next 12 months. you see japan, and in blue the euro area, and in light blue, the u.k., and why is that u.s. -- white is the u.s.. if those recession odds rise to 30%, you should consider rotating away from equities. i have heard a lot more bearish comments on the possibility of a recession from j.p. morgan and the last few weeks. they never that the likelihood

of recession over the next two years at 52% and over the next three years at more than 70%. let's get bloomberg's first word news with juliette saly. juliette: in the u.s., robert mueller may have crossed a line that donald trump set out early in the investigation into possible russian meddling. the latest move is a reported subpoena of the trump organization. trump has suggested that his real estate business is beyond the purview of the investigation. the development triggers new concerns that trump may try to oust robert mueller, which may set off a political crisis in washington, and perhaps a constitutional struggle. with the u.k. still waiting for the kremlin's official response of the poisoning of a former spy and his daughter, that is as the u.s., germany, and france all point to the russians as being

responsible for the incident. the country is set to hold its presidential election on sunday. the u.k. has significant ground to make up on the irish border issue before next week's summit, where aims to clinch a deal on a transition.-- the gap on the irish question remains large. withe eu is not satisfied morton's proposal for avoiding a hard border, it may attach more conditions to a transition agreement. irish prime minister joins us later. in florida, rescuers have worked into the night after a pedestrian bridge that was under construction collapsed onto a busy miami highway. at least four people were killed. vehicles were crushed. the partially built 950 ton bridge had been assembled and

moved into place on saturday. considering imposing a tax. -- national secretary said that the tax will probably need to have a particular target and not apply across the board. the move could unlock the supply of empty homes being courted by developers. 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 . as asian markets were hoping -- opening up, we were hearing about h.r. mcmaster and if you would be fired or not -- if he would be fired or not. the nikkei is closing down and weakness on the large-cap stocks in china. overall, a pretty down day across the asian region, but we

are on track for a weekly gain of around 1.6%, the best in around a month. farmers surprised the mers surprisefar the market. they rose by 6.3%. china unicom also looking quite good. it came through with for your numbers that disappointed yesterday, but the companies ceo said that it expects profits to rise over the next three years. we have seen a lot of the hyundai motor affiliates rise today. it has not been confirmed by hyundai motor, the parent group, kia e have seen mobius and --is and kia rise today mobis and kia rise today. denyinge white house is

a washington post report that president trump is planning to remove h.r. mcmaster as national security adviser. although mcmaster has been praised, last month trump rebuked him on twitter for neglecting to defend his victory in the 2016 presidential election from claims of russian interference. bloomberg editor jodi schneider joins us now with analysis. good to have you explain all the developments year. what is the latest on this particular story? >> it has been a crazy few hours back and forth. the story came out saying that it looked like mr. mcmaster was gone, and then sarah huckabee sanders took to twitter to say that he is not gone and that the president has a good relationship with mr. mcmaster. there is more and more speculation that he will be leaving soon, that he will not be staying in the administration for much longer. the white house is saying that

he has not left yet and there has not been a decision made. it is still pretty clear that there is a rift developing and has developed between the president and mr. mcmaster, partly over the fact that mr. mcmaster sided with gary cohn, economicleft as advisor on the issue of tariffs. ite president has made quite clear that he is going through with the tariffs. matt: we have had reports that mueller has subpoenaed the trump organization. is it the same as the administration? is it really a redline for the president? jodi: we are going to see, aren't we? if that subpoena has gone through and if the request for documents from the chalk -- trump organization, it will be very interesting. the president last year

basically said that any attempts to look into his finances or businesses would be crossing a redline by mr. mueller. he said the investigation into russian meddling in the 2016 election, and not into his own finances. thosey are subpoenaing documents, we will see if the president will make good on his insistence that it not go that far. it could be a medical crisis or even a constitutional crisis in london if he decides to fire -- political crisis or even a constitutional crisis if he decides to fire robert mueller. anna: we have gerard fitzpatrick from russell investments limited with us. as you watch what we are being given by the trump administration this week, and indeed the other stories, around

tariffs and blocking of m&a deals, does this any of this move the dial on your u.s. asset s? gerard: if you had that situation a number of years ago, you would expect the u.s. equity markets to selloff. you can see the strength of the u.s. equity markets in the face of that. this,rket is assuming they are absorbing it more, and it takes a lot more for the market to be derailed. as it really the strength -- it is really the strength of the u.s. earnings coming through and supporting it. we don't necessarily see a selloff in the u.s. equity markets anytime soon. the risks are brewing. there could be more of a selloff at the end of this year. anna: a likely recession next year. will talk about that more in just a second. i've got this chart which shows

broadly u.s. growth portfolio. this is talking about companies that impress on the earnings story, managing to deliver for shareholders, in terms of the equity market reactions. the question is, does the politics continue to not derail that? upo, do we need another like on the earnings -- leg-up on the earnings story? gerard: the earnings have been so good that it has supported that growth so far. the question is about expectations ahead. the harder they go, the harder they fall. the disappointment on the missed earnings is likely to lead more towards an equity selloff. momentum and the

underlined -- underlined strength in the u.s. -- underlying strength in the u.s. economy is good. out, a just want to play couple of weeks ago, daniel morgan told us that the possibility of a 40% correction over the next 2-3 years is likely. we have heard from cross asset jpm and theout of senior economist that the chances of a recession in three years is 73%. they are saying that we are pretty close to the top. if it is that risky, why would you bother staying in? why not get out now before you have to start warming about it? gerard: the risks are rising. our view is that next year the odds of a u.s. recession are rising. in terms of keeping overall

risk, overall goes for so many investors is to stay invested, to see some positive return. being invested in a multi-asset portfolio across a range of reals, infrastructure, estate, they can provide different sources of earning. the european economy. is doing so well. -- wehink that we will think that we will ultimately stay invested, but start to de-risk from u.s. equities in particular, and overall risk profile, start to reduce that, and increased risk of swear. -- elsewhere. what is your s&p target? how much more do you be able to -- do you expect to be able to get out of this bull market?

gerard: in terms of the s&p right now, we see the short-term, the potential for some increase, followed by the momentum. we could edge into single-digit gains from here. by the end of the year we will be concerned about where u.s. equities are. anna: one of the concerns that you have comes from where we are on the treasury story and the flatness of the yield curve. 9400 on the bloomberg if you want to pull up this chart. is tell you to beware of flat yield curves and how that can act as a precursor to u.s. recession. others have talked about how things may be different this time. you don't go along with that idea? gerard: no. outstrategists point this to be one of the key indicators. have a look at this chart. it is so powerful. just before the prior u.s.

recessions, the spread between the u.s. 10 year and two-year, it it starts to get towards zero. when the curve gets quite flat, just after that, the chance of recession increases. that is why it would have been so concerned about u.s. recession. it still applies on interest rates low. it could be from a low or high interest rate environment. we're starting to see the curve flattening and the recession indicators pick up. we saw in early february the volatility pickup. these are warning signs. but again, stay invested, there are opportunities for the early part of this year. anna: ok gerard, taken very much. coming up on the program, vladimir putin versus the west. tensions rise ahead of presidential elections on sunday. with our live in moscow -- we are live in moscow. and clinging onto power.

some fascinating analysis from our government team. this is bloomberg. ♪

♪ matt: tensions between the russians and the west are rising ahead of sunday's election. the u.s. has placed sanctions on u.s. -- russian operatives for

meddling in the 2016 presidential campaign. they are also demanding an explanation for the spy attack in britain. joining us now it is our reporter -- joining us now from moscow is our reporter. talk about the latest sanctions and how they could affect russia. do they matter to vladimir putin more than previous sanctions have? >> good morning, matt. we just got some news that russia plans to expand travel bans following these it u.s. sanctions, but to be honest, senior fellow at atlantic council says that this does not move the needle. is fighting back in terms of the u.s. meddling in the 2016 election, but doesn't hit russians where it hurts? doesn't really move the needle in terms of economics in russia? no.

a lot of these are already on the sensualist. -- sanction list. vladimir putin has shown that shrugging off the west works to his benefit. this only drums up more of this rhetoric of russia under siege ahead of the election, and could help them on sunday. anna: for someone that likes to project a strong image, perhaps there is a play through that. russia pushing ahead with the eurobond sale. is there demand for that? >> that's right. it seems like there is demand for that. russian borrowing costs are the lowest in. four years this seems like the right time to do it for the finance ministry. this came after theresa may throughout 23 russian diplomat's. the timing of this is critical and kind of shows from a market perspective, a show of defiance.

we will get the market pricing today. this could be yet another positive impact for vladimir putin ahead of this election that he is all but assured to win. this could be another sign of positivity for him, but this time it would be from investment, and the market community. anna: thank you very much. we continue to look ahead to the elections in moscow. she will be back later on in the program and we will have plenty of coverage of that. gerard fitzpatrick from russell investments is still with us. as she was saying, this does not move the dial just yet. the global drug -- growth story, i am fascinated about it. that has ifece growth is too hot to handle at the moment.

is this too gloomy for you? gerard: i go along with it. i think there is a lot into that. the higher they go, the bigger that they fall. when economies do so well, unemployment rates get down to superlow levels. you would typically see a higher amount of leverage in the system. if you increase interest rates in that type of environment, it could cause unemployment rates to rise, and it could lead to an increased level of default risk. high,rowth is very unemployment is lower, and if interest rates rise, that is when it is really risky. anna: the too hot to handle makes some assumptions about inflation perhaps. inflation is a little missing in action this time around. i got this chart on the bloomberg.

growth is looking good, inflation not so much. the central bank is showing -- what we are seeing this time. gerard: we have been concerned about inflation for a while. it has been at very low levels. with unemployment rates getting really though, we see that impact on the phillips curve of inflation rising. we anticipate that inflation will rise from here, but we don't see superhigh inflation coming through. matt: i wonder what you think about the next g20 meeting in argentina. be a little more uncomfortable as people start to take sides over the new cold war, so to speak. is that going to hurt growth, do you think, gerard, or does it have no effect? wes it even help growth as start to build new icebreakers

to take over the arctic? gerard: it's fascinating, particularly what has come out of europe this week with the meetings between macron and merkel. economically, there are aspirations to do with the challenges from u.s. and china. with that strong leadership coming through, there has been money behind us, so the potential for investment to support economies is a little like what we got with the financial crisis when interest rates went down low to support economies. the negative is if trade wars escalate. right now we think it is manageable. it is a relatively small percentage impact on gdp, but the risk is that this could escalate and get out of control, and they clearly we would have a problem. matt: gerard fitzpatrick from russell investments. you're going to stay with us, we have a lot more to talk about. angela merkel's maiden voyage.

the german chancellor has to paris for the first trip of her new term. can the two countries settle their differences to deliver reform? we are live in the french capital, next. this is bloomberg. ♪

♪ anna: this is "bloomberg daybreak: europe." 6:30 here in london. over in tokyo, 3:30 in the afternoon. we see the yen strengthening to below 106. aversion,it of risk even if it is not expressed in stocks, certainly come through in the fx market in the asian day. nejra: we are seeing a little bit of concern coming through in the asian session as well. the msci asia-pacific index up by about 0.1%.

we have seen weakness in japan and china. korea trading pretty much flat right now. asian equities are still heading for a weekly gain. let's look to dollar-yen. you just showed the spot price. we've hit the 105 handle in the session. began is the best performing g10 currencies -- the yen is the best performing g10 currencies against the dollar. dollar-yen still clinging to its weekly trend line support. we are not quite there yet. second a look at what is happening at the 10 year treasury yield. this is heading for a weekly decline, the 10 year treasury yield. we are back down today and we traded around 2.82%. the bondre looking at futures, the white line, and below it is the green indicator

-- greed indicator. that tells us a bit perhaps about the bullish sentiment coming through for treasuries and what it means for where the 10 year yield goes from here, especially as we look towards the fed meeting. now as we take a look at bitcoin . we are headed for a weekly loss on bitcoin. this is a technical indicator. this is the death cross. it has not happened yet, but it is edging closer towards that, and it could be quite a strong bearish signal for bitcoin if that happens. the signals do not always translate into bitcoin as they do with other asset classes. we've got some moving average momentum indicators turning bearish as well. matt: excellent to get a little death cross look at bitcoin. german chancellor angela merkel meets her french counterpart,

emmanuel macron today, upholding a tradition of making paris her first foreign visit of her new term in government. they are sent to discuss plans for euro area reform. joining us now is greg viscusi. what sort of reforms are we talking about? as beforee same germany took the longest ever in postwar history to put together a government? waitingn has been rather patiently for german government, because he has fairly ambitious plans. he wants to deep in the integration of the eurozone, for burden sharing, and he is talked about a finance minister for the eurozone. much closer defense cooperation and common policies on asylum, more harmonization of taxes. how far will the germans go in

acceptingthis -- this? probably on the eurozone, the germans are always hesitant on that. athink we will hear a lot public talk about how they are on the same line, but i tend to think that the germans are not ready to go quite as far as my krona wants to go -- mccrone -- acron wants to go. anna: after this meeting, angela merkel has back -- heads back home to germany. >> i'm sure she will take a message in germany's bag. acron has been in a vacuum

for the last few months. they have got a lot of things that they have to get on the table for the summit next week in brussels that you mention, which is going to talk about brexit. i think she will take the message that germany is back, we are ready to work together, we are on the same line about deeper integration of the errozone, deep cooperation with the eu. what exactly do they mean by burden sharing? macron has been very clear that it does not have to do with neutralizing debt. -- mutual life think -- debt.izing matt: greg viscusi in paris. merkel's fourth

term, tied for the longest leadership rein in germany since the war. the euroking at positioning. i've got this chart here in my screen. you can see that leveraged funds are now in a long on the euro -- are now net long on the euro. do you see more room to run for the euro-dollar here? >> i think there is a little more to run. we like the euro at attractive levels. we see an argument that the long-term purchasing parity is undervalued. the long-term is where the ecb likely trajectory is on interest rates. versus the fed, would think that the ecb is probably likely to

surprise the market on an interest rate increase. that could potentially come through and be positive for the euro versus the dollar from here. matt: do you think european stocks have more room to run as well? everyone is talking about the s&p 500. what you think about the stoxx 600? >> we like the european stocks. they are a lot more attractive compared to where u.s. equities are. we see the european growth story being quite strong. that will be supportive in terms of european equities. fundamental and valuation, we like that. the ecb is likely to unwind their quantitative easing. anna: let's talk more specifically. if you like european stocks, what about european banks? this chart shows the european growth story picking up along the bottom.

nonperforming loans at european banks falling at the top. do you like the banking sector with this as the backdrop? the direction of travel for the interest rates is for tighter, not looser policy. gerard: it is a story that is coming through. economy looking better and the potential for default risk actually being reduced, at looks pretty attractive. that would be supportive for the financial sector. i think on the short, the european banking sector is relatively strong. bethe horizon, there could some concentrated areas of bad loan risk, particularly in italy. it is large and we still have concerns relating to the quality of lending in italy. if she should -- you should get stressed in the italian economy --. anna: you mentioned that the

eurozone is in the middle of a midcycle renaissance. how much can the eurozone go its own way if you think that the u.s. is going to go into recession possibly in 2019? gerard: it can only go so far. as the u.s. goes down, you would expect the rest of the globe to be under pressure as well. probably for european equities to underperform less than where u.s. equities would be. i prefer european equities over u.s. equities, if the u.s. gets and trail -- trouble, everyone is likely to suffer. matt: if we go back to this chart we used previously. this is the recession odds chart that i showed at the beginning of the show. you can see u.k. recession odds spiked up to 50% right after the brexit boat -- vote. they have recovered substantially, but what do you make of the u.k. economy as we

get closer to some idea, some shape of how brexit is going to look? gerard: i have concerns going into the u.k. economy given what has happened in brexit. there are a number of concerns. dutchk. has responded market has responded and the economy has probably respond better than some have thought. in terms of risk positioning, that would equate to be underweight u.k. equities. anna: how much are you watching from investors perspective, how much are you watching transition talks? the delegation wants to nail down the legal language around the departure of the u.k. and they want to get a transition deal. how much are you concerned about getting a transition deal next week? is there a little bit of wiggle room from a investorsn

perspective in the u.k.? gerard: the clear reality is that there is not going to be a clear outcome. there is likely to be week after week of multiple negotiations. in terms of next week, the row watch point is watching how the negotiations will develop. will ultimately move towards a harder or softer brexit? that is the key watch point. we think it is moving softer than what was originally expected. anna: great to have you on the program, gerard. we talked to nomura earlier this week. thank you very much for spending time with us. atard fitzpatrick, ceo russell investments. bloomberg news has 16 countries

and has analyzed how long the men and women at the top can hold off election defeats. joining us now is one of the e,thors of the peace, -- piec who joins us from madrid. tell us about the project. how did you work out the longevity that some of these leaders can look ahead to? >> basically we were trying to get a sense of what goes through the mind of these people when they sit around the summit table at the g20, and these sorts of places. while everybody knows about the economic and military power of the world leading nations, if you drill down and see what they have in their domestic situation, that gives a more nuanced sense of how powerful they really are. that tells you, for example, how keek theresa may is -- wea

theresa may is. matt: who are those that are going to last the longest? , slightlynteresting surprising perhaps. there are two figures who stood out in particular, because they are really young, and they are not ruling in democracies. that is the saudi arabia leader and kim jong-un in north korea. if he is not toppled by some kind of assassination attempt or a war with the u.s., he could be leaving the country for the next 50 years -- leading the country for the next 50 years. matt: although not exactly terribly powerful. what about the biggest winners? -- storya great surrey saying that we don't really have any presence in the arctic. how do you put russia and china in the pecking order? are 2 authoritarian

states where the leaders have a firm grip. xi jinpingnping -- remove the constraints on the chinese presidency. they could both be there for the next decade or so, which gives them an added authority when it comes to brokering deals or leveraging their way on the ht on thege -- weig world stage. anna: coming up, we are live in moscow ahead of sunday's election. this is bloomberg. ♪

♪ anna: this is "bloomberg daybreak: europe." 6:48 here in london. it looks nice out, doesn't it? the calm before the storm perhaps. the pound against the dollar is pretty flat right now. traders looking ahead to next week's meeting in brussels.

can a transition arrangement be agreed on? juliette: cme group. the giant of futures trading has approached michael spenders -- michael spencer's ndx group. they confirmed they are in the earth -- nex group. they are in the early stages of negotiating. a representative from cme declined to comment. buyers plan to win antitrust approval -- bayer's plan to win antitrust approval --. the justice department's antitrust division doesn't think that bayer's proposal to sell businesses go far enough. they want them to divest more assets to resolve its concern. 2.4 billionraised

euros. to make --.ing ceo joe further towards kaiser's goal of dismantling the structure of europe's biggest engineering company. that is your bloomberg business flash. matt: thanks very much for that. russia heads to the polls on sunday to elect a new president. vladimir putin is running for his fourth term, which according to the constitution could be his last. with our in moscow with a guest -- we are in moscow with a guest. >> good morning and thank you. that's right, vladimir putin is another term in the kremlin on top of running russia

inc. i am joined by iskander lutsko from sistema capital. we have this eurobond sale to talk about. some are saying that it is a show of strength and defiance against the west against all of this political and geopolitical tension. how do you think this eurobond farewill fair today -- today? >> russia has announced they are planning to issue eurobonds. given the fact that the market is pretty much comfortable with , [indiscernible] the treasury premium is that a six-year low, so i think there is a good demand for it. given it is a new issue, we only had two issues last year. is it time for wealthy

russians who are stashing their cash in london to repatriate it back to moscow? do you think this sale was a demandfrom -- will see from -- outside the country? -- usuallys bloomberg.co [indiscernible] i don't think the russian oligarchs will be particularly interested in those assets. i think there will be more direct investments coming. >> the oligarchs are not quite feeling the stress of potential --? >> it depends. it depends, pretty much. the depends on the type of sanctions.

that has not been related to the freeze of financial assets, which is the major and most dangerous outcome with the sanctions. so far it has been more kind of a [indiscernible] >> domestically, stagnant wages and living conditions has been an issue. do -- boost kremlin the salaries of teachers and doctors with an economy that is so enslaved to the price of oil? --one of the sources of major sources of revenue is obviously oil. we have been seeing a major pickup in oil prices. looking at the russian federal budget, for the first time in six years it is --. well,significant -- obviously we could think about leverage for this year comparing

to 50 barrels three years ago. if you look at the did nominal wage rates, it has picked up by almost 9%. there has been a significant boost in january and february to the state workers. you can look at the pre-election campaign, but it is part of the government's plan that was already announced in may. >> is this the brightest priority for the next six years -- biggest priority for the next six years? youru need to keep elections close to you. average rate is around 39,000 rubles. >> quickly, we are seeing

greater protections measures coming out of the trump administration. the threat of a trade war might be hitting investors. bank of america says that mining is most at risk of indirect effects of this. some say russia can benefit. how do you think russian miners welfare in this environment -- this environment? always a zero sum game. china been one of the major --. russian exporters have approached chinese on specific deals before. to have chinese build their factories in russia or get started on a new project. they have been less communicative on those issues.

now they will be less reluctant to do so. it could benefit both, especially in the eastern part of russia. >> iskander lutsko, becky so much for your time. that was this demo -- that was sistema capital director iskander lutsko. anna: fascinating conversation covering the underlying policy and economy. what kind of appetite will we see for bond sales? meanwhile, european equity markets looks set to pick up from a lackluster session in asia. we are down on the msci asia-pacific right now. u.s. futures pretty flat as we head towards the left trading day of the week. of next will speak to the jd wetherspoon chairman and founder, timothy martin. how concerned is the consumer about brexit? or not at all?

that could be an interesting one. this is bloomberg. ♪

matt: good morning from berlin. this is "bloomberg daybreak europe." i am matt miller. edwards in the city of london. these are today's top stories. matt: where is trump's russia redline? robert mueller has reportedly subpoenaed the trump organization. meanwhile, the white house denies the president is preparing to fire his national security adviser. anna: russia's election. putin run for his fourth term as president as tensions rise between the kremlin and the west. we are live in moscow. matt: brexit borders. e.u. diplomats say the u.k. had significant work to do on the

irish issue before next week's summit. i just want to quickly give you some breaking news from the exchanges. they say their opening will be delayed for the year x -- for the opening. the system is experiencing technical issues, so to be fair, it takes those that trust -- the xetra system longer to open up anyway. anna: let's get to some corporate reporting. 11:00 -- just gone 7:00 in london. u.k. corporate reporting, of course. first-half numbers from jb weatherspoon. revenue, 830.4 million pounds.

weeks.ting to see six misses is the more up-to-date picture. .p by 3.8% the focus is here on the consumer. and on the cost, people talking in this industry about the costs they are trying to incur. we will stay to the founder, tim martin, who joins us in a few minutes time. what do the futures look like? matt: let's take a look at how futures are shaping up after a mixed trade overnight in asia. asia. losses in we see a mixed futures trade here with that futures up -- dax up 1.1%. the dax is heavily weighted with one, which has

been its weakness. a big gain for dax futures. ,ac and ftse futures down although not a lot of size with that move. anna: we have the msci asia-pacific down by .2%. a little bit of nervousness coming through in markets. a little bit of risk aversion. aboutle bit of concern what's going on at the white house, keeping asia's session invested in limbo a little bit. we are at 2.82%. certainly, the relentless rise we saw in yields in january, early february, worth reminding ourselves we are not at 2.95% anymore and we dropped away from that. futures in the united states look flat and negative at this stage. the dollar against the yen making advances against the u.s. currency.

that 106 level in today's session. watching the ongoing political drama. looking at polling results for prime minister abe in japan. that could be crucial. bloomberg first word is up. here is juliette saly. the white house has denied donald trump is preparing to oust his national security adviser. the comment came after the washington post reported the president was planning to remove h.r. mcmaster, with whom he has occasionally clashed. trump has been shaking up his planned meeting with kim jong-un approaches. rex tillerson was fired on tuesday. -- that is, a reported subpoena of the trump organization. breadth off the --

the subpoena is unclear. the development triggers new concerns that trump may try to oust mueller, which could set off a political crisis in washington and perhaps a constitutional struggle. still waiting for the kremlin's official response to the expulsion of 23 russian diplomats in the wake of the poisoning of a former spy and his daughter as the leaders of -- the u.s.,any -- germany, and france pointed is responsible for the incident. this comes as a country is set to hold its presidential election on sunday. he was russia's richest man after spending a decade in prison. the poisoning of that spy in the u.k. is part of putin's foreign policy strategy. >> the message is clear.

we will do whatever we want. we don't give a damn about russian laws and international laws, too. the u.k. has significant ground to make up on the irish border issue before next week's summit, where it aims to clinch a deal. according to european diplomats, while both sides have a deal signed off by leaders, the gap, the gap on irish question remains wide. if the e.u. is not satisfied with britain's proposals, it might attach more conditions to a transition agreement. thesh prime minister -- irish prime minister will join us. florida, rescuers have worked into the night after a pedestrian bridge that was under construction collapsed onto a busy miami highway. at least four people were killed when vehicles were crushed by the structure. bridge hadly built been assembled by the side of a highway and moved into place on

saturday. is considering imposing a tax on unsold apartments in the search for ways -- paul chance of the tax would probably need to have a particular target and -- supply across the board. movies, 24 hours a day, powered by more than 2700 journalists and analysts in more than on hundred 20 countries. you can find more stories on the bloomberg at top . over whether or not h.r. mcmaster was in or out of the trump administration filtered through in the early hours of asian trade. we have seen they can break through 106 to the dollar and that has seen the nikkei fall by .6%, so a lot of risk off attitude. the yen rising on this uncertainty but also on this political instability in japan. we did hear the bank of japan governor has been given another

five-year term. in late trade on the close, the csi 300 down by 1%. we have seen weakness, but the australian market was well supported today, up by .5%, and that was due to a big deal with wesfarmers, the conglomerate. if we look at the stocks we have been watching in the session today, wesfarmers has announced it's going to divest or merge its supermarkets. this is the second-biggest chain and australia. really surprised the market. they might talk about the budding supermarkets instead. we did see wesfarmers rise. it fell to the downside in the most in months. it was up by 7% after mitsubishi updated its rating on the stock, saying it sees stronger sales ahead, and we are awaiting a press conference from the founder. that is hong kong's richest band. -- man.

there is speculation he could announce his retirement this afternoon. matt. matt: thanks very much. juliette saly in singapore. i have got to give you a daybreak issue, a daybreak correct. oneks to henry jones, viewer pointing out that the dax futures are closed for trading. take a look here. this is the world equity index futures screen. we have a number of stocks -- a number of futures contracts closed for trading. -- futures closed for trading. on and so forth. this has to do, we expect, with the system which is down right now. it is down right now. we told you that just before i mistakenly told you dax futures were up 1.1%. we have the futures contracts that are open, anna.

trading down. and those that look like they are showing great gains thanks to hank jones, actually, are closed. anna: thank you very much to our alert viewer for pointing that out. remember, you can message matt arai at any point and use the tv function to get in touch with the team that put it together. chain reported a first half adjusted pretax profit to be us now, tim martin, the companies chairman and founder. looking at the results, you report comparable sales up 3.8%, but you expressed concern about the second half of the year. why are you concerned? tim: there is a fair amount of new taxes coming into play, business rates, and apprenticeship levees and other government taxes, and wages are going up a fair bit, so at the

very start of the second half of the year, it is wise to strike a cautious tone. get the stockto market overexcited. what a terrible thing that would be. we have done well. just taking it slowly for the second half. anna: we don't tolerate over excitement on this program. publisher, they talked about how they face their toughest year in over a decade. are you expecting to face the toughest year in a decade? tim: it's possibly hyperbole, but we are considering that we are in a rising economy over the .ast seven to eight years there is a tremendous amount of restaurant companies in particular that are in trouble, the main sort of damocles for the pub industry, that we pay for more taxes for pint -- per pint and per meter.

-- per meal. the tax for supermarkets is a lot lower end up pushing increasing pressure on pubs as the years go by, and they are closing down. that is the economic picture for pubs in the u k. matt: what can you do to change that? is there someone you can lobby? some campaign you can start? it does not seem necessarily justified that just because you are in a pub, you should pay more than you would if you were buying a beer in a supermarket. the principles of taxation in a democracy is it should be fair, and i agree with your analysis. you should not pay more. in the end, especially as the economy takes a downturn, and a lot more pubs and restaurants start shutting, i think people will be forced to say we should have taxi quality. what can you do? you can lobby government, speak to the press, try and make the

point. that is what i have been trying to do. anna: what are you lobbying the government -- of course, you have been a supporter of brexit. we know. but what are you lobbying for at the moment? are you happy with the way things are developing? tim: i am lobbying for leaving without a deal unless it is on very good terms in march next year. the e.u. is a protectionist organization. it charges large tariffs, taxes on imports, 93% of the world that is not in the e.u.. if we can get rid of those taxes, income and standards in the u.k. will rise. we pay 200 million pounds per week. that can be allocated to the u.k. i think the e.u. has had an unusually good press around the world and should be much more democratic. we want something like the

american constitution which will protect us from plutocrats in brussels. anna: we know that brexit means brexit, tim, so we will see what that delivers. we talked to the management team and they were warning about getting a hard brexit. we will end up with a food crisis in the united ingram, a food shortage. does that apply to you? it is utter and complete tosh. if we go without a deal and parliament eliminate food tariffs, prices in the shops will go down. it is complete nonsense, and the have not said -- that in any written form. matt: thanks so much for your time. really appreciate it. glad to get a few minutes. tim martin, weatherspoons chairman out of london.

on russian operators. tensions mount ahead of sunday's election. a healthy ipo. they begin trading today in germany. we will get the latest from frankfurt. this is bloomberg. ♪

anna: this is "bloomberg daybreak europe." 7:18 in london. let's get the bloomberg business flash. here is juliette saly. cme group, the 56 billion dollar giant of features trading has approached the ndx group about them silly buying the company. ndx, which runs markets for trading, confirmed it is in the early stages of negotiating with cme. said no agreement may be reached. antitrusto win approval for the takeover of monsanto is said to have not satisfied u.s. officials who were worried the merger could hurt competition. according to two people familiar with the matter, the antitrust division does not see the proposal to sell businesses going far enough. one of them said the u.s. government want the german

chemicals company to divest more assets. that is your bloomberg business flash. thank you very much. tensions between the kremlin and the west are rising ahead of sunday's election in russia. the u.s. has placed sanctions on russian operatives. america has joined germany, france, and the united kingdom in demanding an explanation for this by attack in britain earlier this month. joining us is annmarie hordern. talk to us about how this matters or does not to pretend. annmarie: good morning. the latest from the u.s. is the retaliation for the 2016 election-meddling. . we see they are going after two honda groups. individuals who worked for that full farm in st. petersburg and those who were closely connected to a military intelligence unit.

on top of that, we have the warning. infrastructure that is needed by hundreds of millions of americans. nuclear energy water facilities. as someone from the atlantic council said, brian o'toole, who worked on the sanctions unit, says this does not move the needle. seeing how putin shrugs off the west plays to his advantage, it is not likely going to impact these individuals, and really impact what russia thinks. it will probably help him ahead of sunday's vote, anna. matt: they have gone even further, by the way, then shrugging off the west. they are basically pushing off this political news, but they still pushed ahead with a eurobond sale. what are the details of that? they are at the lowest

in four years. the ministry says there is demand. they have institutional investors in europe and we may see demand from individuals who bring cash back to money. russian oligarchs who are stashing their money in london. we could see this as a possibility to move this money back to the motherland. ais announcement came as defiance to what is happening in the geopolitical sphere. theresa may tossed out 23 russian diplomats from london. there seems to be a lot of demand following the s&p upgrade two weeks ago in terms of the market. be anotherhis could win for vladimir putin ahead of sunday's vote. matt: thanks very much. our reporter on the ground in moscow ahead of the election.

today. of siemens begins paying 28 euros per share and the long-awaited ipo which values the company at 28 billion euros. ceo's goal of restructuring the largest engineering conglomerate. for more, let's get to our reporter, oliver. first off, how successful has this ipo been? beenn media has reporting it has not made as much money as had been anticipated with. >> good morning. absolutely right. this ipo or originally, when we looked at it, people were talking about a value between 30 billion euros and 40 billion euros. not value kind of slipped, and we saw investors were worried, number one about market volatility, and they were

worried about how much this company was going to put its growth into its diagnostics division. tohink investors were trying figure out, you know, how successful it was going to be, and because there were more questions than answers, i think that is why that value slipped today. anna: and what is behind the ipo then, oliver? this has been coming for a long time. we have known about it for a year or so. we asked the management of siemens about it. this is a gamble on science. i mean, the strategy for this goes back years, like you said. the ceo has long talked about reducing siemens from an impracticalrier -- terms, what that means is you want to spin off or merge or bring different divisions to the

market, and he did that first with the wind power unit, which is merged with the spanish competitor. they are going to do it with the trade unit, which will be merged with a french competitor. rs. with healthinee he wants to unlock the value of outdivision by taking them of that conglomerate and seeing if they can move a little bit on their own while the mothership, shares, retains majority in every one of those divisions. matt: i remember actually, oliver, when i started covering siemens are bloomberg 18 years ago, they were breaking up their conglomerate at that time, and they have since grown it and are doing it again, which i find interesting. let me ask you about technical issues. they have had real columns of this morning. no futures contracts traded on the dax or other futures contracts. is this going to bungle up the

ipo for siemens this morning? oliver: i cannot imagine they are happy about that. for the first little bit, they are probably fine. we saw their books are covered. i think they kind of did manage to gain the investor interest enough that they should be fine for today. far more interesting is how investors are going to value this company long-term. in terms of technical issues, i am sure they want things to go as smoothly as possible. in terms of what we have seen, i think they are probably fine. anna: oliver, thank you very much. oliver sachgau, joining us from bloomberg news, reporting on that really important ipo we see taking place this morning. that is it for daybreak europe. "bloomberg markets european open " is up next. remember, when you are traveling to work, there is always

bloomberg radio, available on dab in the london area. this is bloomberg. ♪

guy: welcome to bloomberg markets. this is the european open. i am guy johnson alongside matt miller in berlin. castrate, less than 30 minutes away -- cash trade less than 30 minutes away. russia goes to the polls. ahead of this weekend election, we are live in moscow. merkel and -- index, is theise best in the bad for