anna: good morning. i am anna edwards. matt: i am matt miller from berlin. this is "bloomberg daybreak: europe" and this is today's top stories. after thesuries rise fed sticks to three rate hikes. man: president trump is said to be ready to announce about $50 billion worth of tariffs against china. the world's second-largest economy could hit back. breaks hisrberg silence. finally apologizing for the data scandal and outlines steps to

ensure it will not happen again. not everyone is convinced. good morning, everybody. this is "bloomberg daybreak: europe." let's talk about the market reaction we have seen since the fed delivered and -- a rate hike. dovish the language was around inflation and wages and the guidance in the dots, that -- 2018.ovish for 18 the u.s. equities sold off as a result but the asia-pacific session has been fluctuating, we are up by .41%. we are waiting for the big news we talked about around tariffs for the trump administration on china around intellectual property. we will watch out for that. u.s. futures dating ground. the dollar index another victim of what we heard from the fed

and the dovishness in the statements and commentary. the dollar selling off as a result. the fact they steepened the rate expectations to 2019 did not seem to be any comfort. they stuck for three hikes this year did not go to four hikes was what let the dollar a little bit lower. also the trade conversation, revised expectations around nafta supporting the canadian dollar and a mexican and those currencies when higher to the detriment of the u.s. dollar. we are flat on the bloomberg dollar index. our ground above $65 a barrel on wti. inventories in america dropped for the first time in a month and that push the oil price higher. let's dwell on what we heard from the fed. matt: i do want to talk throughout the program about the oil price because it is interesting to see what happened to inventories. let's take a look at the dot plot. click on the previous tap

which is the blue see in the middle, come back to my screen, you can see the old dot plot h ere in the blinking line as i click on the line as opposed to the new dot plot in green. can see what was previously planned. anna: we will have a pack to show. we are going to talk more about the federal reserve and the oil price but we will talk to this european vicehe 7:00dent joining us at a.m. u.k. time. here's juliette saly. donald trump is

overncing tariffs intellectual property violations. the administration is considering targeting more than 100 different types of chinese goods create it will be the first trade action aimed at china which has blamed for the hollowing out of the manufacturing sector and the loss of u.s. jobs. the u.k. is said to be sharing secret intelligence about the nerve agent attack on a former sky -- spy to persuade them to -- expel russian diplomats. 23 operatives were ordered to leave and retaliation for the agent had his daughter. in the u.s., conor lamb has sealed his stunning upset in a special election for pennsylvania house seat that had been in republican hands for 15 years. stateponent,

representative rick's account -- saccone has concedes. trump campaign for the presidential candidate before the election. --na's bank has increased tightened policy in step with the federal reserve. bysing the interest rates five basis points. today's decision is the first following the appointment of the governor and the former number two at the central bank has pledged to maintain the stance of prudent and neutral policy. french prosecutors are charging former resident nicolas sarkozy with accepting illegal campaign theributions from -- before 27 -- 2007 election.

sarkozy was charged after being in police custody since tuesday for questioning why special financial crimes unit. he has denied the allegations. charges are brought during an investigation before a decision is made on whether the matter will go to trial. beganan lawmakers planning the transfer of power to the first vice president resigned.o kaczynski after the sworn in meeting of congress agreed to accept the resignation. is expected to arrive fondly my on thursday. he has been serving as peru's ambassador to canada. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. you can find more stories at top

. japan back online in the region today. we are seeing that rise from the nikkei closing higher by 1%. according to the overall regional index we mentioned the pboc following suit from the fed. you have seen quite a lot of weakness coming through in the large-cap stocks in china and we're seeing tencent's weakness. the aussie dollar fell after a volatile jobs data numbers. let's have a look at the stocks we are watching. tencent in focus, it did come up with the bumper profit after the bell but analysts have been changing their forecast. tag from 538.ice this after tencent indicated it spending plans could impact its profit margins. china mark -- china mobile -- we

are awaiting noble group to resume trading in singapore, currently in a hold. company that is trying to take over, goldilocks has in approached and the board said it is satisfied it can continue as a going concern. did say winding up the company will be difficult. thank you for that breaking news. juliette saly in singapore. fomc raised the benchmark rate a quarter point. it forecast a steeper path of hikes for 2019 and 2020. policymakers are divided on the outlook for this year with the dot plot one-month away from forecasting a median of four hikes. policysignaled continuity by saying the decision taken marked another step toward the scaling back of

monetary accommodation. >> as you know we decided to raise the target rate for the federal funds rate by one quarter of a percentage point. several factors are supporting the outlook. ongoing job gains are boosting incomes and confidence. foreign growth is on a firm trajectory and financial condition jermaine accommodative. this process has been underway for more than two years and it has served and could -- should continue to serve. the relationship between changes in slack and inflation is not so tight. there is no sense in the data that we are on the cusp of an acceleration of inflation. there is no thought that changes in trade policy should have any affect on the current outlook. the cost of capital is one of many factors they will consider, it is not the principal factor but it should invest -- result

in more investment. yield curves has predicted recessions if you look back over many cycles but a lot of that was situations in which inflation was allowed to get out of control and the fed had to tighten and that put the economy into recession. it is not the situation we are in now. anna: jerome powell with his first press conference. good morning to you. it was a bit of a confusing message from the fed and talking about three hikes in 2018 but they downgraded growth from [inaudible] and increasing growth estimates. were you confused by anything you heard or did it fit together perfectly? >> we are -- and think we are going to get that.

rate hikes priced in for the year. we think we are going to get four rate hikes and the shift in the that higher for next year is in line with our view that we will get three next year. anna: how does the level of hikes we have seen this year, the intensity of the hikes we have seen, how does that fit with what we said which some talked about as being quite dovish. there is a lack of wage growth. thato you square the fact they are talking about inflation with this hike cycle. mike: they are trying to make sure -- they are putting rates up. they are saying that there is a strong chance of three and a very good chance that we get for rate hikes this year and another three silly get interest rates to new 3% by the end of 2019.

do not get too panicked about this because and it is fair, inflation and wage pressures are rising at a relatively moderate case. that should be ok for equity markets and the economy. , ie you have interest rates worry a little more about what that might mean for the u.s. economy and equity markets. we have somewhere to go before we get there. matt: you sound as bullish to the economy as jay powell or a in line with him. he says that the economic outlook has strengthened but it is goldilocks because he does not think we are on the cusp of a surge in prices. how does the possibility of a war playe played -- into your outlook? mike: that would be a negative for the global economy. in our view this is more of a --

you are seeing measures but you have to put it in context. the amount, the quantum of measures that are under discussion is relatively small as a percentage of be it chinese or global gdp. it would be better for we were not getting these tensions on trade, but within the context of economy it will not derail. it is still a positive outlook for growth -- global growth and the u.s. economy. -- both ofntions those things look positive. you tend to see companies telling you they will be cutting staff, cutting before recessions and a tell you they want to expand both those things. matt: what happens to the curve saw the we see, we

two-year yield dropped yesterday. do we see the yield stay down and the 10 year yield, with long-term expectations raised? mike: there is further upside for two-year yields. the market is not fully pricing in that end of 2019 getting to about 3% or higher. that moves higher in the two-year. the 10 year will drift higher but less so so we will start to see further flattening of the yield curve. anna: what about the dollar, we saw dollar weakness as a result of what we heard from the fed and some of that has been sustained to today's session. i have a longer-term chart here. just checking the relationship between the s&p and the dollar index and pointing out when we see dollar weakness sometimes it is good for u.s. exporters and we see that type of stock gaining ground. how do you expect that relationship to play out?

mike: it depends on which pairs you look. there is a good chance to see the euro move higher so you see somewhere around the 130 level for the euro-dollar. some of the em currencies as , the dollars are somewhat overvalued on a medium to long-term basis. there is a potential for further dollar downside. exporters in the u.s. and the stock market, that should be beneficial. more to talk a lot about on this thursday morning. mike bell is a global market strategist at jpmorgan asset management. tariffs.over trump's the president is said to be ready to announce $50 billion of intellectual property levies on china. the question is how do they respond? --e we have a trade skirmish maybe we have a trade skirmish. joined for anre

exclusive interview after 7:00 a.m. u.k. time. this is bloomberg. ♪

anna: this is "bloomberg daybreak: europe." in berlin. is we see the msci and asia-pacific up by .41%. let's get to singapore for a bloomberg business flash. here's juliette saly. facebook's ceo has broken his silence on the crisis over access to user dan on the social network. to an the enough criticism. some remain skeptical while the

share price has recovered a little after slumping earlier this week. >> this was a major breach of trust and i am sorry this happened. responsibility to protect people's data and if we cannot do that, then we do not deserve to have the opportunity to serve people. juliette: saudi arabia has told bloomberg there is no decision on where the listing of aramco will remain -- will take place. the kingdom is considering the merits of london, and hong kong. >> aramco is on track as i said before. we are assisting international markets. andyork, london, hong kong, [indiscernible] no decision has been made. bloombergt is your

business flash. anna: a could become even more real as donald trump appears to announce tariffs on intellectual property. the president is considering the levy which could cause $50 billion of economic damage. a former official said if trump sends the order that is a declaration of trade war with china. the u.s. has a verdict that there is an issue with intellectual properties. be worst hit?ll >> this is a big announcement we under ip waiting for

investigation. so far they are talking about 100 goods. it seems to under ip investigation. so far they are talking about 100 goods. it seems to indicate they are going for a swathe and the feeling is that will under ip investigation. so far they are talking about 100 goods. it seems to indicate they are going for a swathe and the feeling is that will have a more material impact than any of the measures. by all accounts the trade tensions would be ratcheted up after the measures are announced. we have to wait and see how the detail plays out. it will be critical which are picked in which are not. matt: what response to a get from china, even if we are not the exactly the product u.s. will pick. will the size be significant? >> all the indications are so far china's response to the u.s. has been subdued. it they have made some soft sounding soothing noises that they could make concessions or

perhaps they could meet halfway. is saying we will protect technology and we will ip from other countries. nonetheless even if china did make concessions there is a feeling they will have to retaliate and that is where you start getting -- [indiscernible] imports from the u.s., we assume they could target. you're getting into the world of u.s. orders for boeing aircraft and other areas of investment and orders. there is a broad range of areas that china could retaliate with. under ip investigation. sodo they go higher first with retaliations or they try concessions and see if that will placate mr. trump. matt: thank you. talking about the possibility of a trade war. mark ballas still with us.

-- mike bell is still with us. he said you are not concerned about the immediatel possibility of a trade war. the premier said he would stop using ip from other countries. is it possible we are seeing a deterrent from china? u.s. this is about the making sure it's tech companies can do business in china without having to give up huge amounts of intellectual property. if the chinese are willing to budge on that then that is the goal of these measures that are being announced in the u.s. and that could help to deescalate things. where we areelpful moving with this but this is trying to achieve what discussions have failed to achieve and there is some potential the chinese give some ground. see if thissting to

works as far as the u.s. perspective is concerned. i have a chart here that talks about some of the sectors in the u.s. that could be at risk. if we see retaliation. you are not at the point where you say we are concerned about world,ings of this soybeans and chip companies. no concerns that this will be does companies will be suffering. mike: we are looking at is it a major problem for the s&p 500. a bit of aget backing down from china, you get some news that there is going to be further movements on ip and quickly.lates it could go the other way. if you see this escalate.

that will introduce volatility into the market in the same way that we saw in february but with different drivers. anyway you're going to see more volatility in equity markets but i do not think it changes the fundamental picture that global and u.s. growth still remain pretty healthy. on a 12 month view that is what will drive equities and it should drive them higher. against a backdrop where we forecast earnings growth that 19% this year. we will wait to hear from the trump administration on china and the eu trade commissioner around the transatlantic conversation. mike bell, global market strategies at jpl morgan asset management staying with us here. facing up. mark zuckerberg breaks his silence over cambridge analytica. next.ng you the latest we have some comments from the man himself after a few days

during which there were no comments. we will analyze what he had to say. this is bloomberg. ♪

matt: it is 7:30 a.m. in berlin, 3:30 p.m. in tokyo. the u.s. dollar down against the japanese yen. japanese markets after a holiday pushed up pretty well. this is what you should be rolling today as we

throughout this thursday. midday we have a policy announcement from the bank of england. and the pound. later eu leaders are arriving in brussels with an aim of signing of the brexit transition deal. the trial in which the u.s. justice department is attempting to block the $85 billion time warner deal is due to get underway. that is a corporate story we are watching. nejra: japan and south korea are on the front foot. overall the msci asia-pacific index trading slightly higher. when we look at the dollar, you just showed the dollar-yen so

weaker against the yen. the yen is the best major performing currency and the aussie dollar the worst. we are seeing some weakness, dropping .9 of 1%. we are fairly steady today so it losses, itonto those has been trimmed back, the relief rally we saw to the fibonacci support, perhaps the fed was a little less hawkish since of people were expecting. some concerns around trade tensions feeding into the dollar weakness. in thea reaction treasury market with the front-end outperforming so we saw curve steepening. we're back to that flattening trend. the two-year yield has been rising for 24 -- 427 weeks. the two-year yield is at 2.3% and it is continuing to decline after dropping for basis points in yesterday's session. andre seeing a good drops

the curve flattening is back. let's take a look at oil. wti trading above $65 a barrel and granted 69. we saw u.s. inventories sinking below the average. it has done that for the first time since 2014. thanks for a much for that. european leaders begin to date meeting in brussels discussing u.s. trade in light of president into's tariffs which come force tomorrow. russia is high on the agenda according to a senior british official. theresa may will deliver a hard-hitting warning over the threat posed by vladimir putin's government. joining us now is jones hayden. the eu about is getting an exemption from the u.s. tariffs? you officialsay in brussels were saying that

they were cautiously optimistic that they would be able to get canada,mption that mexico, and australia have gotten from the tariffs the u.s. plans to put on steel and aluminum. they are going to have to wait and see today. yesterday the u.s. trade representative suggested the u.s. may hold fire on these tariffs on some countries as they continue to negotiate possible waivers. some news from wilbur ross on the subject but not quite a decision. that is something that is on the agenda. what can theresa may expect to get from the other eu leaders tries to persuade them to follow-up on their words with some action? jones: i think so. she is looking for solidarity against russia over the salisbury attack. she has it, public support from

germany and france but she is hoping to get it from the rest of the eu nations meeting here in brussels today. ultimately what she would like is to have a wave of expulsions of russian officials as the u.k. has done in response to this attack. the response on the part of the eu in general has not been as strong as the u.k. would like. she is going to push over dinner tonight, she will give a strong message about how she wants the eu as a whole to respond. thank you, jones hayden and brussels with coverage of the eu summit today and tomorrow. mike bell, global market strategist at jpmorgan asset management still with us. she wants to persuade them to take a tougher line on russia. -- eu leaders have been divided on relationships with russia. this is an interesting test as

to whether the eu can speak with one voice on the subject. many on theare continent who are more reliant on russian gas supplies. there is an impact when it comes to the political considerations as to how forceful the rest of eu are going to be willing to be with russia. i think they're going to find it hard to do too much. anna: what is your expectation for the european equity markets and earnings around you, i have a chart that talks about the comparison between earnings growth in europe and the u.s. and talks about rising eu are gg to be with russia. european earnings. the gap between margins is narrowed a bit. are you expecting that to continue, will we see some outperformance? mike: this year will be almost impossible for european earnings to outperform the u.s. growth european earnings of around 8% compared with in the u.s. where you are looking at somewhere like 19%.

is from tax cuts. it is a bit of an unfair comparison. if you look forward to next year a lot will be determined on what happens with the euro. part of the reason you are getting a percent earnings growth from the eurozone is because there is a potential for the euro appreciation. if we saw that euro headwind become more of a tailwind that would be more supportive. we are still in an environment where european earnings can grow in positive, healthy territory. the economy looks like it is slowing slightly so growth will come in at 2.5%. telling youmi was were getting 3.5. that seems unrealistic. matt: what do you see as far as investing in u.s. stocks from a british or european point of view? is that rising currency ahead

importersheadwind for and european investors in u.s. stocks? mike: it depends in terms of the flow. if you think in local turn -- currency terms there is a good chance that u.s. equities look pretty good this year on a relative aces. once you factor the currency and that may offset it slightly. you have to bear in mind that hedging costs for u.s. equities have been rising as rates go up in the u.s. whether for asay euro investor if u.s. equities will outperform given that potential appreciation and the euro. both markets will deliver positive returns but there is that potential for euro appreciation. matt: we touched on the possible

sanctions we see against russia. i think about this one investors -- from an investor's point of view especially if you get issues with transfers with transfers and other financial blocks are put on. is it less investable, russia going forward due to the salisbury spy scandal? russian you look at equities, they are the key determiners of the market. that will remain the case. oil has been doing well recently. russian equities look ready cheap. there is already a very significant political risk premium in russian equities that has been there for a very long time. this that increase slightly potentially but you are buying rest soon -- russian equities at a cheap level. play it makesalue

some sense. the one thing i would caution is we are in a world where we saw that chart on u.s. inventories coming down and that is supporting the old price. as a result of the increase your seeing a sharp pickup in energy investment in the u.s. so shale drilling coming back on and a big way. if you take the 12 to 18 month comess to shale energy back on stream that could start with some downward pressure. anna: we are talking about the trade story if you are interested in investing in russia. ceo mark zuckerberg has broken his silence. he pledged to investigate where the political advertising firm holds information it obtains from a third-party. critics say this is not enough.

stephanie joins us with more. is the response enough, will he end up having to testify for congress? stephanie: it is a distinct possibility and the fact is lawmakers on both sides of the atlantic have been asking questions from the man with the authority to answer questions about quite serious allegations. this is what lawmakers on the side of the atlantic have been seeing. the have serious questions, they want to know what happened. facebook to know that neglect any privacy laws? this is what the eu justice commissioner said yesterday. she wants answers and this is what lawmakers in the u.k. as .ell as the eu have been saying in the u.k., you have the

lawmaker damion collins who says he wants to hear from the man himself but when he called a catastrophic failure and the same from the president of the european parliament saying he want's toear and he know if there is any risk that their data is being manipulated for political purposes. matt: how can facebook were to legislate data protections more effectively? with washington. -- work to legislate privacy and data protections more effectively? i have to speak from the eu point of view. regulators here are looking at

this now concerning facebook and whether anything was being done in terms of possible privacy breaches. it is very early in the process to see whathave happens now. a lot of questions are being asked. facebook is looking into all of this. regular leaders are looking into all of this. we are early in the process and will have to see what will happen. matt: thanks, stephanie but downey. mark bell is still with us. stephanie is coming out of brussels. i was thinking about the washington issue because so many congressmen are calling of been testifying but if you look broader at technology, is the eu harder on tech companies than the u.s. because it looks like

the u.s., steve mnuchin went down to argentina to defend digital rights against eu legislation. think globally there is going to be a shift towards focusing on the fact that these large tech companies which have huge influence across the worlds going to be a that with that there comes a certain amount of responsibility and that responsibilities to pay a fire amount of tax, you will in europe.ng on that they want to have control making sure these people are properly regulated so you do not get these breaches you have seen recently. that is an inevitable shift that we have to put this in some perspective. tech companies are still managing to generate significant profitability. the fact that regulatory

pressure might increase and the fact that you are going to see moves to ensure a little bit more taxes paid potentially. that is still an environment where these companies can do well. within tech you need to be quite selective. technt to be buying companies where valuations are not too stretched. others were you can by 20% earnings growth below market level. anna: when you're using a product and the product is free assume that you are the product so suggesting that there are many business models that are based around data and are based around selling you data or giving or sharing your data in some sort of way away from facebook specifics. it does not sound like you think there is a broad threat to these business models. look at every sector in the world, regulation is slow

to catch up with technology --ause by its nature it is [indiscernible] it does not make the business model defunct, it means that there are extra things they need to do. privacy,mes to data people need to know what claire data is used for. and that it is regulated and controlled. anna: thank you for joining us. staying with us longer on the program. carlson, thetz saudi prince tells bloomberg about his time and attention. more from our exclusive interview with erik schatzker. this is bloomberg. ♪

matt: welcome back. i want to bring you more from our exclusive interview from the

kingdom holding chairman speaking to bloomberg and his first interview since being released from detention and the riyadh risk -- ritz-carlton. he gave the finer details about his unwanted stay. >> i received a call at three or 4 a.m. by a higher government official that was also my friend. the king and the conference would like you to come to the royal palace and for a message from higher authorities. i said for sure. i am a member of the royal family and i obey the rules and the directions of my king and crown prince. i left with my car to the royal palace. i was met by [indiscernible] and told that the king's wishes that -- is that i go to the ritz

talksn hotel for some about certain matters. whatever is asked from me i accept and obey. erik: did you have a reason to suspect that there would be a round up or you would be part of it? guest: no. was it like inside? chance tore was a with ourervice competitor. i said to my friend bill gates and others, no one competes with us. they are no four seasons.

erik: you used your time to conduct comparative analysis. guest: you have to use it efficiently. besides watching bloomberg. no truth reports that you were in a attention sell. guest: i read about the report that there was a special team for torture. it never happened. i was always in the ritz-carlton carlton. i never left the hotel. to walkre you allowed the grounds? guest: i was allowed to walk and swim. ou allowed to talk with other detainees? no, not at all, even my kids. erik: what did you eat?

a bit difficult to educate them. the soup used to have some butter. it took 24 hours to educate them and i want the tomato soup to be natural and to be without any animal stuff. it worked well. prince speaking to erik schatzker, fascinating insight into what was happening behind closed doors in saudi arabia. minister says the kingdom's planning and international bond sell in the coming weeks. saudi getting a lot of attention as the is it by the saudi arabian entourage to the u.s. continues. do we have a sense of what size the bond issuance is going to

be? yousef: in 2017 we had five for $21.5 billion and it is expected to could see smaller issuances but more of them throughout 2018. they are trying to raise some $31 billion to bridge a budget deficit. struggling to grow and it shrank in 2017. let's hear from the finance minister as to when and where we could see the bond issuance. issuing every arm month. the debtt of market. we expected to be very soon. yousef: this would be the first bond issuance since the anticorruption crackdown so we see how an investor sentiment has fared since. matt: i am here in berlin. there is still no update on

where saudi aramco will list, i find it interesting as i spent a years on the new york stock exchange four. what are you hearing? yousef: there is no update as of now. time is running out. the s&p has reported that would be a delay till between 19. our reporting suggests it was not the issue of regulation or an issue of lists, it was an issue of resistance from investors that they were not buying into way -- the way the saudi aramco story is being hits. here is the finance ministers view. >> aramco is on track. as i have said before. [indiscernible] international markets. new york, london, hong kong and saudi arabia. no decision has been made. yousef: where are looking at a

three-week to her of the crown prince of saudi arabia in the u.s., he is expected to meet a lot of executives. maybe there could be something fresh coming up. anna: thank you. word with mike bell. we saw strength on u.s. inventories. will that be sustained? mike: you have the picture where demand is strong and supply is coming in and inventories are coming down. what is going to happen is you will get a response from the supply side so you are seeing a strong shale drilling come back on. you look at business investment, it is up 8% year on year. that gives you some idea of the magnitude of the bounce back you're seeing an energy investment. that should put some downward pressure. anna: thank you very much. mike will continue his conversation with us at 7:30 a.m. u.k. time. he will be on bloomberg radio.

jay takes a hike. raising rates and signaling a steeper incline ahead. will get analysis of the market moves. this is bloomberg. ♪ retail.

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♪ matt: good morning from berlin. this is "bloomberg daybreak: europe." anna: these are today's top stories. the dollar extends losses and treasuries rise after the fed it sticks to just three rate hikes this year and forecast a steeper path through 2020. anna: on the brink of a trade were, today, president trump is set to announce $50 billion of tariffs against china. the world's second-largest economy could hit back. message ceook's mark zuckerberg finally apologizes for the data scandal and outlined steps to ensure it won't happen again.

not everyone is convinced. ♪ matt: watching futures get out of the gate here and it looks like a negative start to trade could be indicated. we are about an hour away from the start of the equities trade. about half aown percent right now. it looks like we could have a negative day for stocks in europe today. indeed. we will look out for where we actually end up opening. weativity looks to be where are expected to go at the start of the trading day. that contrast to what we are seeing in asia. in the wake of the fed increasing interest rates, there

was some dovish language in .here from jay powell all of that weight on the s&p a little bit yesterday. that has not been the case in the asia section -- session. we have been fluctuating really. wedding for more clarity around the trump administration's intentions toward china. we wait to see whether we get that tariff as expected. the bloomberg u.s. dollar index is pretty flat right now. saw the that we steepest part from 2019 is not enough to rally the greenback. also bear in mind, the trade conversation is very important here. we saw canadian dollars and mexican peso's gaining. above $65 in an imax

-- in the nymex. see bund futures rising as well as older futures of rising. is actually down slightly with the yield up. the u.s. 10 year yield right now 2.869. the battle to take over takei continues. they once again reject melrose's offer. let a tale about about what is coming up in the program.

let's go to bloomberg first run update. u.s. president donald trump is set to announce about $50 billion in terrace with china over intellectual property violations today. administration is targeting more than 100 different sites of chinese goods. first -- it will be his first trade agreement with china. the u.k. said to be sharing secret intelligence about the nerve agent attack on a former spy with key allies and an effort to persuade them to expel russian diplomats across europe. minister theresa may ordered retaliation.

other countries to follow britain's example condemning russia and taking action against kremlin agents. lamb hass., conor healed his stunning upset for a pennsylvania house seat that had been in republican hands for 16 years. his republican opponent has finally conceded a week after voting ended. wind is a defeat for president donald trump who campaigned for the gop candidate just before the election. 10 across central bank has increased the cost of short-term loans to commercial lenders tightening policy in step with the federal reserve. the people's bank of china raised the interest rates. today's decision is the first following the appointment of the new governor.

french prosecutors have said to have charged former president neglects her cozy with accepting illegal campaign contributions. parising to a person in prosecutor's office, sarkozy was charged. he has denied the allegations. in france, charges are brought during investigation before a decision is made over whether the matter will go to trial. peruvian lawmakers have begun a begun planningr transfer of power. martin will be sworn in friday.

he has been serving as peru's ambassador to canada. global news 24 hours a day, powered by more than 2700 journalists and anaylsts in more than 120 countries. you can find more stories on the bloomberg at top . we are seeing weakness coming through in the big stocks in china. concerns about what these tariffs on china are going to be what we saw with the fed hike. elsewhere, we are seeing a little bit of flat movement coming through in big trade in india. noble group in focus today in singapore. the company essentially try to tell investors to back its debt

plan rather than push the company toward insolvency saying --t the likelihood olde targets cut from the likes have warned that its profit margins could be hurt. company --num all in the back of the tariff talk as well. matt: thanks very much juliette. jerome powell's first fed saw theas chairman benchmark rate raise. policymakers are divided on the outlook for this year with the

-- now just one move away from forecasting a median of four hikes. powell signaled policy continuity by saying the anothers taken marks step toward the gradual taking back -- stepping back. >> it is another step in the process of gradually scaling back monetary policy as the economic expansion continues. his gradual process has been under way for more than two years and should continue to serve the economy well. ofa: let's get the thoughts philip who joins us on set for this conversation. where you left in any confusion as to whether they were more or the safeststic about thing this time around composed -- compared to last? >> i think it is pretty low

in terms of what matters for the median term is the median outlook. the fed is more bullish about the state of the economy looking forward. really though, it was very well-managed in that the fed new very well what most people will be looking at trade away was how many hikes do they think will be necessary this year by the dot plot. heard, we are one soc member away from a fourth dot plot. anna: very close to making that move from three to four. if i click on this preview button, it allows us to compare, this is the current state of the dot plot as per the meeting yesterday. you can see where it used to be. you can see it is clear if you put it -- political on your own screen that that is where we

were and now we are where the yellow ones are. somely, there has been move upward. how he's great at with what has been said around inflation? he was surprised about a lack of wage growth. this still remains a key conundrum doesn't? >> sure. ago.g up to a year those will come on in the wash in a few months time there is on the way to side, did -- given how tight the market seems to be and the fact that the u.s. is experiencing relatively peaceful growth, wage increases should be stronger. that is not a phenomenon limited to the united states. you can see it in the eurozone, to a certain extent in the u.k. it is something that is happening worldwide. philip?y is that,

unemployment is at 4% in the u.s. economy. we looking at the wrong measure maybe? >> to a certain extent, i think we probably are in the sense that the unemployment measures aren't really conveying the total picture about how much capacity there is in labor markets at the moment. for example, an issue in the united states, and certainly the eurozone is the fact that we are seeing some recoveries in the precipitation -- participation rates which means that in terms of the population as a whole, there is capacity there to go forward and perhaps even to see unemployment rates to go below what one might have considered to be the long-term sustainable rate. the situation is very complex and it is difficult to put your finger on why exactly this is happening. matt: a lot of times the media will get a little too sensationalist when it comes to forecasting the possibility of a trade war. we previously spoke with a

strategist from j.p. morgan that said maybe a trade scrimmage, but we are not there yet. what do you think about what we are seeing out of the trump white house? is it going to insight around problem for the global economy at the -- economy? >> we don't know for sure. certainly, the trump administration is not the first one to start imposing tariffs on various countries. certainly, i think we're looking at a situation that is escalated beyond what we has seen certainly in recent years. yes, there is a risk that you see retaliation from china, but one would hope that coming so financeer the ministers, i think -- perhaps things will calm down. perhaps the white house is sending out signals to china for a level playing field. see whether we get

any movement from china as a result of the policy and the comments we are getting from our trump white house. have you done analysis on what any of these tariffs would mean for global growth? oxford economics talks about if similar retaliation from the chinese, that would .ake 01% percentage points this is just the start of something bigger. billioneory, that $60 comes to something around 10% of u.s. imports from china. in terms of the impact on chinese growth, as you say, it is likely to be fairly small. the impact on the global economy really depends on escalation of these tariffs and whether you get retaliatory measures from china and the situation escalates. there is a recognized

feeling that this sort of that things will be patched up in due course. anna: the global economy relies on the dollar of course, the price of the dollar is increasingly important. this is five days worth of currency moves against the u.s. dollar. what i thought was interesting was the mexican peso and the canadian dollar are underlining how we are seeing the conversations around trade impact on currency markets. this was attributed to those who know more about these things than i do. the really leads me to ask broader question about where the dollar goes and how important that is to the global outlook. how is the dollar going to manage the trading rhetoric and how does that matter to you? >> it certainly does matter. -- what we are

i think in terms of the dollar, we have forces pushing in both directions. our own projections to the u.s. economy -- currency is that it is going to end the year at similar levels to where we are now. it is not going to be a straight-line path as you get issues such as potential trade wars and monetary policy moves causing some uncertainty in clouding the outlook. the new cea says that you should die -- by king dollar and sell gold. what do you think about that in the sense that gold is not necessary as a safe haven? do you think we are seeing interest in yen or swifty at all this year? >> yeah. i think if you're really concerned about the prospect of

an all-out global trade war, certainly gold is a good place to be. concerned, you can be quite contrary and say what is going to happen to the dollar? bearly the first move would to pass the u.s. economy. the next development would be let's move out of risk assets and moved to save havens. what is the biggest safe haven market in global financial markets? it is the u.s. treasury market. what you can almost a see is a bounceback in the dollar. that is not our central view. we tend to the opinion that these things will be smoothed over in due course. if you were concerned about of global trade war, i would be very reluctant to go short of the dollar. matt: we are showing the treasury yield on the lower third below you. what do you think about the pessimism that we still see in that market?

have we gone past it with 3% the peak or could we see yields go even higher? >> no. if one is reasonably upbeat about the u.s. economy, which we are, we have the impact of the trump tax cuts and of course the lifting of the public expenditure packed in the u.s. to figure as well, we should see a sustained increase or at least a sustained run of decent growth numbers in the u.s. economy over the next few years which should encourage federal reserve to continue tightening. judge that is consistent with the weaker bonds market and say by the end of this year, we would not be surprised if we saw the tenure up 3% or 5%. anna: i wanted to get your thoughts on the bank of england because that is another interest rate decision we are going to hear about today.

we will seewhether a movement in the month of may and about theresa may, will she be able to deliver? how do things progressed from here to made to ensure that we do see things developed with over a hike as the markets expect? with may take off u.k. time today, there is no hurry. two members one or who disagree with that view. plan, goes according to that will be quite a nice grabber fee to move to a may --rease with knows a price surprises to the financial market. looking at the prime minister, what has got to go well in the short-term is brexit. we have the transition agreements and hopefully it is a standing exercise by eu leaders on friday.

that, politics never goes away. particularlyions in metropolitan areas in the u.k. on the third of may. in terms of currency movements, that is something to watch out for in the context of worries about political stability. the stress of the consumer and the wage packet and how find that goes, the underlying data whether a. asking year of declining real earnings may be coming to an end. we also got some news on the deal in the health service yesterday, didn't we go >> sure. on tuesday, we had a sharp expected fall inflation.

in terms of pay packets falling in real terms, i would think that situation is turned and we're looking at slightly stronger outlooks in spending this year and next year. that is consistent with the bank of england continuing to raise only gradually because we are not looking at a big acceleration in may. a strengthening from very low levels over the last year. matt: thanks very much for joining us. really appreciate your input today. he is going to stay with us. let's get the business -- bloomberg business flash right now. te: facebook ceo has broken his silence. mark zuckerberg outlined concrete steps the company is taking to make sure such a leak does not happen again. it was not enough to end the criticism. some remain skeptical the company is doing enough while this company share price has

only recovered a little after plunging earlier this week. >> this was a major breach of trust and i'm really sorry that this happened. we have a basic responsibility to protect people past data. if we can do that, then we don't deserve to have the opportunity to serve people. juliet: saudi arabia has told --omberg minister says the ipo remains on track in the kingdom is still considering the merits of london, new york, and hong kong. saidg, the saudi minister it could be delayed until next are depending on market conditions. we are assessing study international markets, new york, london, hong kong. no decision has been made. the trial in which the

u.s. justice department is trying to block and $85 billion deal, we will get that story may be in the next business flash. anna: thank you very much, juliette. sometimes you start a story and it disappears before your eyes. leaders meet in brussels today where they will discuss headline issues including u.s. tariffs. let's get over to francine who joins us from brussels. francine: we are very pleased to be joined by one of the vice president of the european commission. thank you for joining us this morning. sustainability is a nice word. sustainability is something that governments want and companies

do for good pr, but is actually make a difference? do people care about it and are they investing in it? increasedy, we see investment in sustainable and green investment. that is what our action plan on sustainable finance is meant for to actually make changes across the financial sector. different players in the financial sector to steer them toward more green and sustainable roles. cine: you see companies that say that they need assurance from government and that the rules don't change and everything is fair and stable and nothing is retroactive. do you need to put more pressure on governments to give those assurances to investors? >> if you look at our action plan, it is of course forward looping. it is not interactive, as you said. it is exactly meant to provide more clarity and guidance for investors like clearly defining

what is green and what is not. greenng green labels, centers so that investors can andly navigate landscape sustainable options as they prefer. to clarify the duty of asset ,anagers and investment firms that they need to explain to the client that sustainability. we are also looking at potential requirements. also to support bank lending more towards sustainable projects like energy efficient cars and other activities like that. aboutne: are you worried egos of what is going on in the world, people will be distracted about thinking about those? what does that mean and how far does the commission go in

actually helping the u.k. achieve an agreement? to finish on the sustainable, we see the momentum is there. countries are taking those commitments, so we are confident we will be able to move forward and eu is willing to wait this fight internationally against climate change. in regard to your second question on brexit, it is something that is going to be discussed now in counsel with a draft mandate. it is something we have been working on for quite some time, this enhanced framework. we can imagine this being discussed in the context of brexit. rancine: we hit up the can -- commission would be little bit more flexible, is that what we are going towards?

>> we first need to get the mandate from the council. --e you have the mound day, mandate, we can discuss it. we have been outlining our approaches already during the last year or so, explaining that we take more proportionate approach, meaning that those markets that are more sustainably important for the eu and scrutinized in terms of -- that is something which doneates and needs to be in different sectors according to different pieces of legislation. leaving,with the u.k. eu passport cannot be available to u.k. financial institutions anymore. francine: the u.k. once mutual

equivalent. my other question would be on financial contracts, what can be done to ensure financial contracts remain valid after the u.k. has left? unilateralnts is decision, so we basically they eu takes a decision for the set countries legal framework and supervisory practices and basically delivers compatible results to the eu framework. regards of continued contracts, it is something in the best also being explored by supervisors and regulators. of theobviously aware position, but it is also clear that there is more work to be done by public institutions and market participants themselves. francine: why does the commission proposed a 3% tax?

what is the likelihood that anything like this would ever be passed? >> if you look at the corporate that some, we see global companies are paying tax rateslly lower than additional companies. provisional company's pay an effective tax rate of 20% or 22% whereas other companies 95%. -- 9.5%. --need the 3% tax rate is meant to be a temporary measure until we find a concrete solution. actually, while we are putting forward this proposal is because we see member states are

starting to move forward themselves, and we don't want some kind of presentations with member states each unilaterally trying to solve this problem because then we will have a mutually incompatible solution for different member states. cine: is there a tax level, is at 1% or 2%? we need a unanimous agreement. 3% tax.utting forward a taking into account taxes these companies are already paying. much for thank you so joining us. guys, i'm going to hand it back to you. we will have more on brexit and sustainability throughout the day.