mark: they won't proceed with this share swap plan. -- amidst a trade dispute with trump, global stocks rise. president trump's personal attorney were sees as part of a probe into a possible financial crime. the president calls it a witch hunt. ♪ mark: welcome.

let's check in on the markets. president jesus speech giving -- speech giving a boost to stocks. china's president struck it can celebrate ko'd on -- tone on trade. consequently, bloomberg commodity keys -- commodities index up on the second day. been inies have a much the firing line amidst this trade spat between the u.s. and china. it comes after back-to-back losses on the commodities. we saw a big move in dollar ruble yesterday and that continues today. 4.5% is the dollar gain against the ruble today. biggest increase since january 2015. since december 2016.

tougher u.s. sanctions and escalating tensions between the u.s. and russia over the conflict in syria also giving traders cause for concern. the dollar is rising in the ruble is sinking. coming up, we will talk trade and the markets. day, jerry moran joins us out of the facebook hearing on the hill. here's nejra: the first word news. u.s. -- here's the first world news. nejra: president trump has condemned a raid on his longtime lawyer michael cohen. he paid $130,000 to stormy daniels and it than a key figure in election-meddling.. >> it's a real disgrace. it's an attack on our country and for true sense. an attack on what we all stand and i when i saw this

heard its, heard it like you did. i said that is really now a whole new level of unfairness. nejra: the u.s. special counsel is now reportedly investigating the payment made to president trump foundation by ukrainian steel magnet during the talk during the campaign. according to the new york times it's a broader examination of foreign money towards trump and his associates during the years leading to the election. as investigators subpoenaed the trump organization for the array of records about business with foreign nationals. russia's ambassador to deny nations has hinted that his country may except a security council resolution to investigate suspected chemical attacks in syria. theinvestor also suggested deadly attack never happened or was orchestrated by the u.s.. the comments made a month -- comments came during widespread condemnation.

>> the monster responsible for these attacks has no conscience, not even to be shocked by pictures of the children. mark zuckerberg will tell congress later that facebook's problems are his responsibility. he is due to give two days of testimony over the worst crisis in the company's history and he will say it did not do enough to prevent fake news and harm to users. with theeady met senate commerce committee's top democrat, bill nelson of florida. to be very forthrightly that we were lied to and we should have caught that. i believe that but i think in today's world, that's naive. news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries area and i'm nejra cehic, this is bloomberg. talk trade and tariffs. chinese president xi emphasizing

china's opening up to the world in what he calls a win-win result. bloomberg's chief asian correspondent will be join us later. let's have a chat with our guest. . sharon, if i could start with you. it's good news if there's not going to be a heightening trade war between the u.s. and china. the markets will like that. they have been fearful of more protectionism because growth has been slowing. the market has been very volatile. mark: it takes two to tango, doesn't it? jumpstarted the equation and then there's the xi side of the equation. xi has done his part, will trump do his part? the hardesthat's

thing to predict. this involves a number of topics it will take a number of months and a number of ways copper mines can be found. most importantly, the underpinnings of the global still decent.are the market will look for opportunities to stabilize. mark: are we just in a. of volatility? -- or just in a time of volatility? great: we had a time of returns with no volatility and we at and locks people described it as goldilocks. got both, we have which is good, but perhaps slightly slowing. you have all this talk about more protectionism which is going up and down the pending on the week. less positive world, i guess, automatically for equities and we have more volatility in share prices. al those things amount to

slight shoulder ratio for exec investors. -- for investors. the key takeaway from the speech? was it a meaningful offer? on a headline basis, there were some all of branches on the table. he talked about the need for more imports and to protect ip. he spoke about measures to open up the tariffs industry and make it easier for foreign carmakers and importers of foreign cars to operate. on a headline basis, there's plenty to go around. detail.lem is in the we've heard a lot of these announcements before especially on financial services and imports. and even the pledge on cutting tariffs on imported cars isn't exactly game changer. on the one hand it's something

of a win from mr. trump. but in terms of the bigger picture, it's hard to see how this speech really diffused the wider trade tensions. end of theis the trade spats? be -- andmay not even may just be not even the end of the beginning. i think much will depend the two factors. first, the details. we've heard a lot of this before but investors really want to see, what are the nuts and bolts of all this? how will you cut tariffs, how we protect ip, what kind of imports we buy more of? and of course a ghost the other side where how will the u.s. respond? buying more imports and cutting tariffs on cars will not address the major issues.

the devil is in the details. also does mr. trump think that's enough or does your leg encouraged by the fairly mild concession and we continue on this treadmill for some time? those of the critical unknowns. mark: great to chat to you and karen. sharon and that most are here. are here.and themos here's the volatility chart. we know what happened at the end of january and early february. it leads to the obvious question. it's been a mainly equities thing that this worry, the trade fears mainly played out in the equity space. four to spill out over into the fx another asset classes? themos: your question has many

different legs. you look at the fundamental set up for volatility. this is an environment where upper caps off still shrinking so even though volatility is not at the 10 it's at a 15 to 20 kind of level. spikes have been part of the cycle and therefore their much close to the situation you're describing. if the cycle is to prevail, is more likely to converge towards fx run the other way around. the other question you're asking is how does this trade war affect currencies? the reality is although there is a consensus that the dollar would strengthen on the back of such trade tensions, the reality is that it ethical terms is very hard to happen. there are a lot of side consequences of how things are happening.

for instance, this discussion yesterday about china moving its currency left and right. on thea direct impact euro which is positive run the negative. we saw that happened yesterday. what we wrote last year is at the dollar would weekend -- weaken. trade tensions were not trade that. that's what happened. there are certain currencies affects more and those have been volatile for their own reasons. that may remain so. sharon, i keep reading that outside recession such volatility and declined should warrant investors to buy equity. is is it as simple as that? emos was saying

about volatility being too high and it will come downtown tiny that, i probably agree. i think outside of recessions and we are not forecasting recession and most people aren't. capacityrown to their in the case of the u.s., and i think growth in the u.s. will be affected by the fiscal changes. valuations have come down that we've had a bit of a lower data. , in the casee not of europe, they are long-term averages. where is the yield you get on bonds are currently low. main point would be that relative to last year come where everything was great and you'regreat returns,

probably going to settle into a slightly higher level than last year but not as much as we had in the last couple of months. please stay there. they will both stay with us. plenty coming up today including: rated -- including michael: rated. and the saudi crime prints and french president emmanuel macron are in paris tonight. can they patch up a couple get relationship? ♪

♪

mark: i'm mark barton in london. officeshas raided the of president trump's longtime lawyer michael cohen, seizing documents after special counsel robert mueller applied for search warrants. he's been a key figure in a series of issues. he paid $130,000 to adult film actress stormy daniels over the alleged affair she said she had with trump. he said he made the payment without the president knowledge using his own money. the president spoke out against the raid. >> it's frankly a real disgrace. its attack on our country in a sense. it's an attack on what i stand for. so when i saw this and what i heard it, i heard it like you did. that is now in a whole new level of unfairness. how much so this move the

markets? when does the whole investigation feature in your category of risk? we've spoken about the trade side. what about trump and his political machinations. themos: i think the most important angle in all of this is what does this introduced to the policy side as we approach the midterm elections. the closer he gets to midterm elections, the more initiative he's trying to get. part of the fiscal package was part of election cycle. we are also getting a lot more noise. a lot of the items discussed in his campaign on trade. as things get closer, you'll probably get more of those announcements. for us mostly about the timing of the policy. and how the political side

accelerates or decelerates these announcements. ago people months are telling me that u.s. stocks with a place to be because of the tax cuts and they are in season. we are getting earning estimates rising but the valuation the market is falling. is that a no-brainer? sharon: it comes back to the point that risks are bit higher now weatherby political risk or more policy risk on trade. also the momentum of growth. it's not that we are not growing and we are growing relatively fast. globally, probably doing 4.5% which is pretty good. is starting market to worry and markets are pricing the future not the current quarter last quarter. what is the u.s. versus europe equities debate looking like now? hasn't shifted?

the burst of volatility? sharon: europe in the most recent u.s. corrections have not been huge underperformer. is not been a big outperform either. in the most recent correction we had an u.s. technology, for example, which saw the whole market fall, europe did quite well as europe doesn't have a big technology sector. your perhaps is not have the exposure to the things people are most worried about. in the begin of the year as well when you had a bit of a correction, the concerns about higher inflation, europe has lower inflation and worry. but also equally less growth. you talked about how some suggest the dollar should strengthen. you put that argument to the side. what hedges should we put in place that may be have little in but have that

downside protection in negative outcomes? interesting an question because this is how we have basically structured our set of recommendations. there's a number of different rates out there and another of trades that are the metric here. one such area is that the market has priced a little bit too high the prospect of inflation, a little bit too high how conservative the central banks will be. space, emerging market technology stocks are a lot more subject to all the trade related tensions that we are seeing compared to develop market stocks. trade another symmetric which has these hedging properties. talking about canada, it's a

place where growth is likely to taper off. inflation is going to be softer and on top of that, if you have more trade tensions, you probably will get further volatility there. all the things are items we actually recommend. mark: what changes have you major european equities outlook? we still believe that equity returns will be reasonably good because you don't have a competing asset class in europe that offers you very good value. i think equities have disappointed us in being both a little bit more volatile than expected and we did expect volatility to pick up. and earnings haven't collapsed in the case of europe. they have held up recently what you haven't seen upward revision. year willarnings this pan out in europe about eight or we hadch is pretty good about for five years of no

earnings growth so you're getting some earnings growth in europe. valuations are about long-term outlooks of the not extremely expensive. that all is up to me to be environment where europe offers decent enough fellow times. the hero hasn't moved an awful lot this year. it did strengthen a lot last year and that definitely hit the earnings last year. but earnings still grew after about 15%. they could have gone a lot faster if it wasn't for the stronger euro in the case of europe. european companies don't have the big tax cuts in the not doing the buybacks that means that european earnings and we are payingh copies are more exposed, probably means it's a little weaker than u.s. growth. that gives you a slightly lower set of earnings. eight to 10% is a pretty good mark: situation. any sector areas you like? sharon: cyclicals are areas

where we see good value emerging from europe. for many years, people didn't want to touch utilities oil companies or also. they didn't trust the valuation and entrusted dividends. these were potential traps. now that we have reasonable growth in europe, you can look at some of these areas but many cases they are offering yields of 45 -- 4% or 5% and will give you a reasonable return. banks are quite interesting as well. growth in europe without the banks to. mark: thanks to join us today. still ahead, fx rate strategy at ubs. --y with us as the crowding saudi crown prince wraps up a three-day visit to paris. he is expected to attend the

chief executive forum lori leaves this evening. the meeting with emmanuel macron may help patch up a complicated relationship mark by disagreements over the war in yemen, relations with iran. us now is caroline. can we expect a big announcements? caroline: i'm inside the saudi business summit in paris and we saw the energy of the minister coming in. have deals. in to this coming business summit in order to discuss as many as a dozen mo use. bash -- mous. there could be as many as eight

contracts with french companies worth as much as $10 billion. also see yields related to tourism and saudi arabia. no big military announcements are expected to the situation in yemen. france has been accused of selling weapons to saudi arabia that have possibly been used in yemen. that explains. nonbinding agreements as well. macron will visit saudi later this year for bigger, binding contracts. given the complicated nature of the relationship between saudi arabia and france, mobile macron's line be in tonight's dinner? we have a press conference at 6 p.m..

it's going to be a balancing act for emmanuel macron. between condemning saudi arabia for the conflict and military strikes for saudi there and the same time keeping them on the side to save the iranian nuclear agreement. thanks a lot. up next, the waiting game. robert kaplan says the u.s. /china trade spat won't be solved anytime soon. that's next. this is bloomberg. ♪ welcome to the xfinity store.

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come see how you could save $400 or more a year with xfinity mobile. plus ask how to keep your current phone. visit your local xfinity store today. mark: this is bloomberg surveillance. here's nejra cehic. reiterated have

opening sectors to auto manufacturing. comment in a speech that warnick is returning to a cold war mentality with donald trump. confident that with capitalforts, the market will continue to enjoy health and development. our marketing environment will be greatly improved and property rights will be protected. china will enter a new phase of opening up. nejra: donald trump is condemned the disgraceful fbi raid on the office of his longtime lawyer. tohael cohen paid $130,000 stormy daniels and has been a key figure in the investigation. >> it's a real disgrace. it's an attack on our country

and what we all stand for. when i saw this and when i heard really ad that is whole new level of unfairness. reporting --re reportedly making -- reportedly looking into a payment made by the ukraine. these are in the years leading up to the election. that came as investigators subpoenaed the trump organization for an array of records about business with foreign nationals. russia's ambassador to the united nations said they may accept the resolution to investigate chemical attacks in syria. they suggested that a deadly assault on the weekend either never happened was orchestrated by the u.s. the u.s. laying

the blame on the syrian president. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries, this is bloomberg. thank you. glencore says they are canceling the share swap to sell the biggest to commodity exchange. another move with the loosening of the russian tycoon whose business empire is the subject of harsh u.s. sanctions. when was this meant to happen? will: it was meant to happen in the coming months. favor thatcally a glencore was going to do to underpin this idea that he did.

not huge supplies. it would have to summon the relationship. this is on hold. he has resigned from the board. focus will fall on this big contract that they haven't. mark: what could happen? will: it's likely looking at sanctions that glencore won't be able to buy out of. ank: does any of this have impact on glencore? will: even if they lost all of some flows, there will be compensation from the fact that they have a position in the american markets it's doing very well.

the future of her south is looking pretty bleak at the moment. , yesterday, were not sure. we are allowed to accept the payments. we hear that they aren't willing to do business with them anyway. dicey.s the key will be with the kremlin does to try to underpin this. they employ 100,000 people. mark: i know you will be familiar with this function. i want to show the one day move in the ruble are in all of these currencies are rising against the ruble. most are rising by 3%. once going on. concern?ust sanctions does this show us what happens

in the asset space when geopolitical flareups happened? >> there's always the door to enter. sometimes it's much bigger than the exit. definitely as the year started, there was an assumption were that was justified that with the trump administration, maybe there was a smaller failing from in global markets. some assumption has been sick -- shaken for sure. that, currencies are driven by long-term fundamentals or -- they are all doing well. selloff, there ofl be a point, a level

emerging markets. in all fairness, the fundamentals are good case. mark: thank you for joining us. the bloomberg managing editor for commodities stays with us. let's talk about the dallas fed president. he said this won't get results. the damage of the receipt is prolonged. his focus lucidly with bloomberg. say that i would guess that both sides might be well served to lower the heat on the rhetoric. it would have to be a private discussion, only on reciprocal trade tariffs, but also on issues like intellectual transferand technology

and the ability of foreign companies to do business in china. blunt andt requires direct private conversations. i would guess that leaders around the world would be well served to lower the heat on the rhetoric so they can have those private discussions. >> it's interesting for the fed. aroundsensus was solid three interest rate increases. then what do we get? tariffs on aluminum and steel. china fires back. $100 billionraises more. it was easy to say that's a small part of the economy. if it escalates and you hear trade war all the time, at what point is it an issue for fed policy? >> it's important to emphasize the only tariffs that have been

implemented are on steel and aluminum. the others are threatened tariffs. i would still be hopeful that when we look back on this year or two years from now, there will be very little in the way of tariffs actually implemented. i really do think it's too early to judge how this is going to affect the economy. we do think the rhetoric could goes on long enough to have a chilling effect. mark: that was robert kaplan. he says it's too early to assess the impact. he said very little has been implemented. >> the subject has been implemented. that, i think the market will always price probabilities. are notcts of tariffs often linear or very

straightforward. tariffs, youmpose end up taxing your exports as well. a level of collateral damage. you need to create subsidies to offset that. it's complicated. when you look at the global setup, the redirection with in the late 80's, japanese firms had to start producing in the u.s. to avoid quotas on import restrictions. these created changes for the landscape. let's not forget there are also winners. there's another one that steps in. is implication straightforward. the market is always priced.

mark: he reiterated just reiterated his view that the fed will raise rates two more times. are you a three person or a four person? >> they forecast three more this year. that isarket is priced, a lot for the market. you have reached the ceiling. if anything happens between now and the end of the year, the market will need to price this out. in that sense, the market pricing is fair for now. ark: we will be back in second. stay with us. there is plenty coming up today. go on the call offensive, telling investors they are confident.

zuckerberg testifies in front of lawmakers as he seeks to patch up the privacy crisis. this is bloomberg. ♪

mark: welcome back. i am mark barton in london. are havingls cautious optimism despite a weak start to the year. sayo draghi and colleagues the growth is solid despite global trade.

the governing council meets in a couple of weeks. forld investors have caused concern? i am going to clear the data as leveled off. last year was such a strong year, when you put it in perspective it's bound to be hard to repeat. does it change the dynamic when it comes to ecb policy and changing going back to normalization? >> there are things that changed for sure. the data is slowing. slowingntum and grosses and that has the consequences for markets. marketshappens, equity and people turn to fixed income. factors benefit from

that. europe stands on the winning side of this. easing financial conditions and the surprise is behind us. u.s., said that, in the in europe the level of growth matters more. you sustain this growth for a number of years, you will see balance sheets improve. you will see the unemployment rate him down. the gdp ratios come down. these are very important structural marks. the process of having strong growth is important in europe. sustaining that is important. particularlynot strong, which basically means we

have to think about how they guide markets. acceleration is isntloaded, the curve tapering off. in the environment where inflation stays below target, they may need to say we are ready to wait a little bit. receivemmendation is to that and position for a steeper curve. let's going to break a set of this range? risk is-term, the main 135 next year, the market may ignore the divergence in interest rates. you may have small bouts of dollar strength.

long-term is 135. the dollar is weakening. the net external liabilities are ballooning. is an effect on the dollar. when it moves, very little stands in the way of it. 135 is not something you can rule out. mark: thanks for joining us. next, the facebook chief executive is set to tell congress all of the social networks problems and his role. more on his testimony next. this is bloomberg. ♪

mark: economic summit, politics, this is bloomberg surveillance. let's check in on the markets and see with happening to all as set classes.

this highlights everything you need to know and a little bit more. stocks are up for the third day in four days they are welcoming president g. conciliatory tone on trade. in the currency market, you will see little change from the second column currency. you've got bond yields rising. we have sovereign risks in the column. i want to show you it's happening to the ruble. these are rising against the ruble. the drop is 8%. is since 2016.el january, the most since

of 2015, investors are weighing the implications of those sanctions opponent friday. you've got the attention of the russia and the u.s.. citigroup's surprise index for the world. the chart for europe the u.k.. we are seeing growth and that's beginning to show signs of aging. this is gone back into negative territory. time since august, this measures whether economic data works. declineseen a steady since the one-year peak in december. this is a chart to keep an eye on in these volatile times. all of facebook's problems are my fault.

tells what lawmakers will lawmakers. they are in damage control mode since 87 million users could of had their data used by a political consulting firm with ties to president trump. he met with bill nelson, the top democrat on the commerce committee that will be questioning him. nelson did not mince his words. his sight,not someone else can misuse for people trying to do us harm. i believe he understands that regulation could be right around the corner. caroline hyde joins us. we've got this prepared testimony. we've had time to go through it. what is going to be the essence? caroline: mia culp a.

we are sorry. this is what we've done about it. this is what we are spending on it. the main issue is let's not talk about legislation. this is what they are trying to diver. we know from the statements that they will say it's my mistake and mark zuckerberg says it is his mistakes. the onus is on him. they are taking the changes they've made to the platform, they will also talk about the money they are investing in protecting data, trying to overcome what is outrage at how russia might have been able to influence the presidential election and how 87 million people had their data get in the hands of cambridge analytica. senators with four minutes to speak. lack anyg to

legislative. mark: is this going to be an issue longer than we realize? returns: if you look at of the companies that are very focused on using data to make money, like facebook and twitter and alphabet, they have underperformed. the other tech companies like , theyand amazon and tesla are up 200% in the last four years. be traders are aware of this longer than the concern we have now. developments of the last 24 hours, he deleted his facebook. he's been quite outspoken. he is coming out and

saying he is worried about the governance of facebook. this should lend weight to investors. this is the second largest public investment fun in the u.s., $220 billion. he thinks mark zuckerberg has too much power. mark: thank you for joining us. we've got a special edition of bloomberg technology starting at 630 u.k. time. always, bloomberg surveillance continues. tom keene joins caroline. they will speak to the deutsche bank chief economist. this is bloomberg. ♪ retail.

under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store

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chemical weapons, france and the united states consider military force against damascus. president is briefed by secretary madison his generals. mr. mccrone once faxed to be established. it is truly unprecedented, the fbi raid a practicing attorney's office. the privilege has been broken. the client is president of the united states. we consider the new volatility in the dollar and the lira and the ruble. good morning. this is bloomberg surveillance. i am tom keene in new york. caroline hyde is in for francine. it's really important here. this is something to do with your world of technology. that is this extraordinary ballet of mark zuckerberg on capitol hill. ballete backstory on the

with his 500 handlers? caroline: it will take two days on capitol hill. it will have long political jousting and very little on the legislative discussion. i think it's going to be a me a couple moment. will look at that worldwide throughout the day. here is taylor riggs. taylor: president trump is mocking a raid, colin it a disgrace. tonts seize records related $130,000 michael cohen paid stormy daniels for keeping quiet about her claim of having sex with mr. trump. it is part of an investigation into financial crimes. robert mueller referred the case to new york. they get a judge to approve the search warrant.

move has made the latest in a fight over trade with the u.s.. they filed a complaint with the wto, challenging tariffs on steel element. they have 60 days to try to settle the metal on their own. the chinese president is trying to diffuse the dispute. u.n.a's ambassador to the may accept the resolution to investigate suspected chemical attacks in syria. he suggested the assault of the weekend either didn't happen or was orchestrated by the u.s.. the president will decide on american retaliation. one of two russians poisoned in released fromen hospital. she's been taken to a secure location. her father remains hospitalized. he is improving rapidly. the russian accused

government of being behind the attack. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries, this is bloomberg. tom: thank you so much. it news we've got, let's go three quickly. we are moving around on s&p futures up 27. dow futures are up 260 points this morning. caroline, more from london please. caroline: we are on the cold war mentality. up we go in the european stoxx 600. this will be reducing tariffs on a cars. his cold war dead for russia? we see weakening once again in the russian ruble. this is hardly the weakest we've seen it since 2016.

dollar ruble is what caroline has there. i go to euro ruble, which is just another way to do it. a long chart with a blowout in 2014 after record weakness. this gives you some scope and scale of what we've seen off the chemical weapons allegation in syria. what do you have today? caroline: i'm checking that out as well. there is a how much weakening, up to two years of appreciation. that is back and forth when you're looking at the russian year, it is up 7% on the but more in terms of average moves in the previous years. russia fors back on today. tom: thank you. let us look at the comments of

leadership of china. the president told the world to get ready for a new china while giving a keynote address during china's answer to davos. confident that with these efforts, china's financial sector will be much more competitive. our capital market will enjoy healthy development. industries will be accelerated. our market environment will be greatly improved and this will be protected. china will enter a new phase of opening up. tom: comments from the leadership of china. david will join us from deutsche bank in our next hour. right now, stephen engle of bloomberg news is our asia correspondent with decades of experience. the is so important here is

davos of asia. who is he speaking to? who was the audience today? >> he was speaking to an international audience clearly. this is the blowout forum for asia. it's a conference that started 17 years ago. i've been here 15 years. they are trying to get a consensus, often difficult with the opinions between japan and china and korea and the like. they are trying to get a consensus agent -- asian voice. china is open for business. they are going to counter the protectionist sentiment coming from places like the united states. he did not mention the united states or trump. we are getting a tweak here. if he was the character

today, the state media is the stick. the new openings will benefit many trade partners, but not those that violate wto rules or start trade wars. the idea here of multilateral and orchestrated speech by the leadership of china, what is his tone and his belief in a multilateral solution versus the president's effort of a bilateral discussion? stephen: he doesn't want unilateral. he wants -- he wants multilateral, not unilateral. he doesn't even necessarily want bilateral. he wants these disputes to be resolved through the wto mechanism. he played the good cop role here of taking the high road in the trade dispute.

this was his first opportunity to respond to donald trump's second round of threats. an additional $100 billion we got last week from the white house that is potentially in the cards. he did not attack the united states. he positioned china as a champion of globalization, a champion for internal reform and opening up the markets. that new phrase, this is a new phase of opening up, it wasn't new policy. there wasn't much new element being put in there. i've heard a lot of these speeches. my initial reaction was skepticism. this could go one of two ways. i'm going to put it in this way.

it is just more rhetoric coming from an emboldened leader who just got through constitutional changes. he's never been more powerful. he wants to show the world he is the champion of globalization. it could be more empty talk. there is a common phrase here from foreigners and that is promise fatigue from the chinese. they are promised to protect intellectual rights, financial services. we haven't gotten concrete details. this is going to be his equivalent of the tour through the south. to the south. he's promising reform. maybe we can look back on the state as being that point. we really don't know. engle, he isphen in china. the traders are

following this. we are joined by james. we are talking about stocks and asset classes. james, let's start with you. james: there's everything to like. i think what we need to recognize is the conversation is going to go on behind closed doors. i look at this. good morning. i look at the flow of news here. there's been very little market reaction. we will get the lira and ruble in a minute. what you watching for right now? see isink what we diminishing returns. we see a lot of headline risk. we've had the overnight news and some harsher comments.

this could be a protracted affair. going back to my default decision, it's similar to what we see in brexit where the market is immune. there is going to be escalation or de-escalation. we are following similar situations. to avery vulnerable shutdown of global trade. we saw the risk on risk off currency move higher on the back of the chinese presidents comments. those movese of look to be diminishing. tom: that's where i want to go. articles, sorts of from strategists i respect. they are really vociferous straight up or straight down in performance. do you feel we are a precipice now?

is it steady as you go. jpmorgan is out with earnings on friday. james: i think we will see heightened volatility. say 19 percentage points, double last year. i think the earnings numbers will be hugely important. progressnd us how much corporate america is making. the real benefit to the tax cut, that we know in december. the first quarter announcements with fourth-quarter results, you have to wait and see. i think the numbers will be stronger and surprise the market. caroline: i want to go into research.

of driving in terms down the trade war, your belief is it becomes more powerful when it comes to the currencies of the world. does that stand at where we are? >> i think it was interesting here is given what the president just said, the internationalization of the europeanconomy, bilateral trade exposure to china has grown exponentially. that will require import costs. this is a process that will likely continue over the next 10 years. inclusion,iving the this is a story that should support the increase, approximately in line were we see sterling at the moment. tom: thank you so much.

headlinese to monitor , looking for any headlines in as many stories. china,next hour on please stay with us. caroline hyde is london, i am tom keene new york. this is bloomberg surveillance. ♪

taylor: more fallout over those. glencore has resigned.

the u.s. justice department has removed a major roadblock to the biggest deal ever. takeovers approved the of monsanto. that's according to the wall street journal. they reached an agreement that means the deal could hurt competition. airports are being targeted today by striking public-sector employees in germany. they canceled more than 800 flights. 6%on leaders are demanding a pay raise. that's your bloomberg business flash. caroline: thank you very much indeed. donald trump's personal attorney is taking center stage in the investigations. the fbi raided his home, hotel room, and office. how will the markets react?

james, we saw a dip in the futures and now we are back above 1%. exerciseey get more about the political risks surrounding the president? are minorhink they compared to chinese protectionism. i think the markets will remain effective. caroline: you've been saying we're in a band. what about the dollar going forward? is it exposed to the political issues we see? is the downward trend going forward because more current to coming to the fore? situation political is playing a secondary role. we actually think it's going higher. .e've got a number of factors

we think the markets are underestimated. only one fed hike priced in. the u.s. economy is on much firmer footing. that should lead to it. we have this story with a flow-based dollar coalition us. tom: how about a bombshell chart. this will be the single best chart today. yesterday, at 2:00, the united cbo,s budget office, the released a bombshell. i'm going to go to you. you have more gray hair. this is payrolls backed 30 years. this is the average of the 20 years before the crisis. the is the animal spirit cbo came up with going out

another 10 years. u.k.as in europe and the is a job formation that is totally unacceptable to politicians. how do we reduce the animal spirit? james: i think they will continue to strengthen in the context of the current political environment. most policies are pro-business. mr. trump has removed players of regulation. he has cut taxes. many americans will save the world is a better place. not that,to the is it's wage inflation. we've seen this in the phillips curve, the relationship between wages and employment levels. i think that will reemerge, but we have disinflationary drivers

in the context of technology and globalization persists. caroline: we are discussing the u.s. data and what the deficits will come up with. on bloomberg tv and radio, we ,ill bring you coverage of more mark zuckerberg's testimony to congress. this is bloomberg. ♪

tom: good morning. caroline hyde is in for francine in london. any set of geographies, washington, paris. we hope to go there in a bit. we have headlines. these be very careful here. as we turn to the bloomberg, russia is said to have jammed some u.s. drones in syria. that's according to nbc. we have no agreements on a trump/putin meeting yet. that is the new service mentioning this. the united kingdom is not in these discussions. "yet." word here is caroline: precisely. at the moment, we've got more issues at home. brexit is her main focus, the irish border continues to be her

main focus. we have not seen her weigh in on the russian reactions. i'm looking at ruble reaction to the headlines. the depreciation continues. we are up 3.5%. we have more coming from the russian ruble and concerns about people being embroiled in these sanctions coming from the united states. it's going to be a fascinating conversation. about going to be talking the new energy finance summit and a conversation with the ceo of nelson. this is bloomberg. ♪\

♪ tom: good morning, everyone. bloomberg surveillance. caroline hyde and tom keene in new york. we are following the bombshell announcement yesterday in

washington. we will have much more in our next hour. is an investment banker. i want to come to this chart, the bombshell on the $1 trillion deficit and what it does america. i want to bring this to dollar dynamics, the average nonfarm payroll for the 20 years before the crisis. these were shockingly low job estimates yesterday of the future out to 2028. solution, is always a a nation's currency is always a solution given economic growth. do you assume long-term structural dollar depreciation? >> are fair value estimates are pretty much where we are for the euro-dollar rates, but i think

in the conversations with investors over the last months, this took a wall between the headwinds and structural dollar headwinds, and the focus is on the current account deficit and fiscal deficit, which will run in excess of 10%. and then you made that would political uncertainty, so this is the backdrop that does not seem to be with the dollar. if our estimates are right with the fx reserve allocation perspective, then central banks are and will continue to drift doing from the dollar. we think the world is becoming de-dollarized. p the number ofe -- the number of pegs linked to the dollar are machine. -- are diminishing. and bank of america merrill lynch concerned that corners stop buying the world

printed full faith credit usa paper? karma: there have been rumors and speculations that the chinese might be cutting back on their purchase. that isn't evident in the data at the moment. we have to remember that the u.s. remains the reserve asset of choice. it is the most quickly trade -- the most great -- the most liquid in trading. caroline: therefore, when we look at the u.s. and the $1 2020, youeficit in still are going for the u.s.? >> i still think u.s. companies are very important. i look at the trade-off between

valuation than earnings growth. it is the correct time. the u.s. equity market has the capacity to benefit. what happens to u.s. economic growth of the long-term and if we practicing real benefits of the tax cuts, we could get enough spread to ensure that deficits could get into reverse. i am not overly worried about the current level of the fiscal deficit. tom: superb conversation and the cdo report buried. a huge blockbuster yesterday. i'm sure they will have more on the template nominal gdp -- that attempted nominal gdp -- the tempid nominal gdp. islor: china's president trying to dial down the attention of the u.s. of a trade. he addressed a number of

president trump's come complains today. i confident that with these efforts, china's financial sector will be much more competitive. our capital market will enjoy healthy developments. auto industries will be accelerated. marketing will be improved, and policy rights will be protected. in short, china will enter a new phase of opening up. filed abeijing complaint on president trump's tariffs on steel and aluminum. they have several days before a probe would again to settle it on their own. president trump's personal attorney is said to be under investigation for possible financial crimes.

according to the washington post, they seized records related to the hush money paid to stormy daniels. robert mueller referred the case to federal prosecutors in your new york. called the radio disgrace. the trump administration once congress to cut domestic programs that will refer to the spending plan. democrats agreed that boosted military budgets in exchange for domestic spending. some appeared reluctant to go up one of the few partisan deals that made it to congress. mark zuckerberg will tell congress today that the social network's problems are his mistakes. he visits lawmakers the day before he testifies before a house committee. he will say that facebook did not do enough to prevent foreign interference in the election and hate speech. s&global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am taylor riggs.

this is bloomberg. caroline: thank you. the saudi crown prince continues his international charm offensive with his final day to france. first, is this. at the contracts -- business. a few contracts may be signed and then dinner at the palace. the business meeting is taking place. which companies will win out? 18 to beect as many as signing. the total has confirmed that he with joins convention saudi aramco and plans to invest more. especially when the comes to

chemicals, and we also were having kids over here, this business summit, the hotel chain , the vfp chairman, and we expect [indiscernible] all of these details in the couple of hours. no major military contract expected due to the difficult the u.s., where there are a few agreements when it comes to culture. the saudi's will send a delegation next month for the first time. what about the relationship between macro in the saudi leadersn? it is a balancing act, and we will get the president of france

ahead of their meeting tonight. what tone will he strike? caroline c. they willl -- they will hold a press conference at 6:00 p.m. france time. condemnede, macron saudi for what is happening in yemen. there have been two demonstrations in paris. yesterday, we had a human rights organization, calling on them to act and stop the strikes in yemen and blockade them. time, macoroname needs to have people on his side to save the uranium agreement. that is important when we know he will be in washington, d.c.,

to meet with donald trump, and will try to convince donald trump to say in the -- to stay in the uranium agreement. tom: they are not talking military business deals but the future of syria, which goes back to 1960. the reality -- 1916. the french have a difficult history of representing the majority sunni, which are sponsored by the crown prince, and saudi arabia, against their leader. cron balancing these action minorities of syria? -- these fractured minorities of syria? not want to he does take sides. he wants to go to everyone. he does not want to go and take

sides with what is happening in yemen. syria, -- thato would be a red line. that is also a red line for barack obama. the situation is different now. macron has been talking to donald trump on the phone after reports of the chemical attacked over the weekend. we will see whether the u.s. and france take joint action in syria. right now, the french have confirmed they are gathering evidence, and if there was enough, it is possible he could be a joint action tom:. i saw that report this morning. , we had a audience clear idea of president trump with secretary mattis, and with mr. trump's affiliation and affection for the generals of the pentagon. what is the relationship of mr.

macron with the present military? caroline c.: he is a chief of the military but has also been careful when it comes to celia because of the intelligence before airstrikes -- comes to syria because of the intelligence before airstrikes. andmilitary has the ability macron has been cautious when it comes to really committing to a joint action in airstrikes. tom: what are the polarities in paris within the newspapers, looking back to nigeria, 1956, with all of the -- algeria, 1956, how was domestic grants arabs, holiday responding to what mr. mcclellan is looking to do? do?r. macron is looking to

even though it still is a scarring that french population, you have 4 million arabesques or of -- aerobics, or of arab origin, still living. were arab origin, still living there. origin being the linked to a terrorist that are small, but macron is very careful when it comes to military intervention. tom: thank you. we look over to headlines out of paris and washington. the president of the united states calling these attacks in his words "imminent." i'm not sure if that means that we will find out as we move forward. coast-to-coast, your morning briefing on radio.

look for that on bloomberg daybreak. caroline hyde, tom keene, stay with us. this is bloomberg. ♪

♪ caroline: i am caroline hyde in london with tom keene in new york. we are going to talk ecb. officials expressed cautious optimism in the euro area economy. president mario draghi and three of his most senior colleagues signaled growth has fallen despite low inflation and a global trade spat. this came over two weeks before they meet to discuss how and forward.ight move is everything is rosy as the ecb says or should investors be

concerned? we have an investment manager with this. is it euro strength iran out because of this ongoing -- here on out because of this ongoing focus on growth or should we be concerned area? look at the main indices on bloomberg, we are down to the weakest levels since the crisis comes of it some cause for potential concern. we are relatively optimistic on euro area growth. we think you on growth -- that q1 growth will grow. we see the initial the for the euro given the fact -- initial dip on the euro but we see a recovery into that next year, given that ecb asset purchases will come to the end by december can the market will focus on the 2019 rate outlook.

caroline: looking at those data points, we have industrial production. we have had weakness in some of the data leading up to this point. is it a bit? >> i do think the tone is weaker than anticipated and trade war these are a compounding back to. -- compounding factor. i am looking at continued opportunities for quality international growth companies like some who reported excellent results. when a look at the french economy, the opportunity in domestic french economy underpins the case for other companies. i think residential properties in germany look interesting because there is a shortage. people want to buy. there is a very big shift in the way they view property. tom: i am going to give up the script after the festivities of

deutsche bank yesterday, i do not want your opinion on the senior management of deutsche bank. they think germany looks so good, so we will see that move from paris to germany. will we see cross-border action from major european banks? jaemmes: you will see it within the eurozone because it lends itself to cross-border banking, so yes. tom: i hate to say it, but i need a single point estimate. karma: we think we will be up 120 and the near-term risks off to the downside and 115 by the end of q2. tom: thank you. it was very cool. it was something to see. the final charge teapot it off.

mr. reid of the green jackets. look for him at 10:00 a.m. today, worldwide. this is bloomberg. ♪

♪ taylor: this is bloomberg surveillance. it is another set accurate uber at the european union top court. they rejected a challenge to a law that led to get uber top managers in france. treatednk it should be -- they discussed whether it should be treated as more than a transportation provider. a bank is figuring out where it wants to be strong. key,ting in the u.s. is they say, per serving german clients abroad. apple has gone all green. the company says all of its sites worldwide are being powered by clean energy. apple has 25 renewable energy plants around the world. 15 more of being built. that is your bloomberg's

newsflash -- business flash. tom: the new story on syria this morning is interesting and most of it is centered on russia. russiaeign minister of and the foreign minister of north korea met, and the french press announced this morning that russia will have conversations with israel in the coming hours and day. perspective, we speak to gregory white in moscow. i really do not know where to begin, other than the idea of seeing the minister of russia come with decades of experience, having a discourse with united states of america that does not have a secretary of state. in russia, how is it treated that the white house is so i

talk at this moment? gregory: it is in the narrative here of the disorder in the american system in the russia propaganda picture you get. trump is held up as a guide they are holding up hope for, but the rest is portray as anti-russian, and something that inevitably against russia, and that is attracted to the stability of putin. there have been three options laid out for the president in terms of how to respond to chemical warfare. one option involves a russian response. if the united states goes after combined sites in syria, of syria, iran, or russia, russia may respond. are those studies and discussions occurring in the

hospital? that kind of stuff we don't know, but russians have gone public that oppression advisors were hit in any kind of u.s. strike, they would fire back. it is a dangerous moment because it is not clear where russian operators are. the israelis struck. -- they were at the base where the israelis start, days before, so the risk of these population is quite substantial and the levels of context within the military and u.s., it isn't clear how will they get along and if they are able to communicate and say, here are our guys, be careful.

it is front in that sense. caroline: the tensions between the west and russia were heightened to a certain extent in the united kingdom with the poisoning of the russian spy. we understand the daughter of the spy is being released from the hospital. how has russia been covering that? dr., they found to cousin, who has become a star of television here, for her efforts to try to get the u.k. and -- to get to the u.k. and visit her cousin. the british side had denied her visa and russians are arguing it is a violation of rights and they went access to the victims. tom: i'm sorry to cut you off, we have to leave it there. coming up on china, david folkerts-landau. ♪

♪ tom: this morning, friends and the united -- france and the

united states consider military force against assad. the president is briefed by secretary mattis and his generals "fax to be established." the fact is it is truly unprecedented. the federal bureau of investigation rates a practicing attorney's office. lawyer client privilege has been broken and the lawyer is michael: and the president of united states is the client. and theel cohen president of the united states is the client. good morning. this is bloomberg surveillance, live in new york. i am tom keene. in london, caroline hyde. when you work at bloomberg technology, i need a brief youbut great what we listen to today from mr. zuckerberg? caroline: he will say it is his fault that it is eating into

facebook's profitability as they invest but to me, it will be how he avoids regulation across social media, including facebook. tom: we will have live coverage of that. right now, a morning briefing with taylor riggs. taylor: president trump this homeing an fbi raid on the of his personal attorney, calling it a disgrace. according to the washington post, records related to the $130,000 paid to stormy daniels for keeping quiet about having claims of having sex with mr. trump is related to a possible connection and other crimes. to approve adge search warrant. china has made the latest move in the fight over trade with the u.s. beijing filed a complaint with the world trade organization, challenging president trump's tariffs on steel and aluminum.

they have 60 days to settle the matter on their own. the chinese president is trying to defuse the dispute by reiterating promises to open sectors from banking to carmaking today. at the united nations, russia's him said there is hinting moscow investigate suspected chemical attacks in syria and suggested the assault over the weekend either did not happen or was orchestrated by the u.s. president trump said he will decide on american retaliation for the attack in today's. one of the two russians poisoned by a nerve agent has been released from the hospital. spy's daughtere was released and her father is continuing to be hospitalized improving. they have accused the russian government has been behind the attack. s&p -- as being behind the

attack. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am taylor riggs. this is bloomberg. tom: let's get to the data check. futures up 28. dow futures up 261 points. oil was a bid and the euro is flat. caroline: i want to dig into the reaction of the chinese president, looking conciliatory with getting a lift. we are seeing a rally in mining stocks and bmw doing very well. but notably, we have got to focus on russia, as well. we are seeing 3% weakness on the russian ruble. tom: the turkish lira is weaker, as well, all of that on syria. let me go to a chart that matters, euro-ruble. in russiaerm weakness

as they struggle, the ruble wheaton's once or twice and that puts into perspective the weakness in global versus the euro. caroline? caroline: also russian stocks have weakness. we are seeing a slight bounce back at currently, significant eyeing opportunities are seeing. if you look at the valuations, u.s. selling russian stock valuations to the 26 month low. check out the recent fall off in that short. -- in that chart. tom: we are honored to bring you david folkerts-landau. he describes his research capability and historic research on china lows. he joins us with caroline in london. it would be appropriate to ask you, with your years of service to deutsche bank, your thoughts

on this generational change in senior management. how will they say deutsche bank? morning, glad to be here. normally, i would not comment on internal deutsche bank fears, but this is such an important change and exciting day i got i would let go of that for a change. i believe this advisory board has been head pointed in extending you and matt -- outstanding new management pass. these you guys, who have been at the bank for a long time, decades, and note the bank inside out, went through the strategy and determined to implement what has been decided for all of us at the bank, this is an exciting day and they are happy about the outcome. if you look at the investment the 20this now run by

veteran who knows investment thinking inside and out, hard-working and dedicated lawyers. if there is anyone who could successfully lead an investment bank, it is down. i really steady pair of hands are on the managing board, and christian, having grown up in the bank and seeing the retail side, i think when you look at past changes, this really is a generational change, putting competent people in place. thissaid, i never saw enthusiasm on the inside given all the posturing as we witness our last monday eight hours. tom: i will ask you a question because you have been a mentor to so many, not only at deutsche bank, but in economics. what do you say to a young turk

today in new york or london with deutsche bank? the ceos and people who have put together, what do you say to that young employee today your deutsche bank? david: month that question.for me , -- love that question. for me, it has been to get the big macro trend turns right. the little stuff will take care of itself. if you want to do macro research, we had the place to do it. deutsche bank has a tradition for a strong macro group. you know others and we had tried for the last decade and a half to be a top of it from as far as street research. we can attract anyone we want to. we tend to focus on those with a strong tie to central banking research but we range across a broad range of topics, including

china, trade, and the ecb and euro. r let me turn -- turn to china. everyone is worried about china's effort to stop buying full faith and credit u.s. paper. is there validity down the road that at the margin, china will stop buying united states debt? david: no. what has happened over the last three weeks or four weeks should be interpreted as a climbed down on the part of the chinese. this is one issue where the u.s. has a strong hand or fairly open economy with no tariffs comfort to china. it has tolerated the current deficit for the last 20 years. the international financial system with the imf has failed to correct these global

imbalances comes the chinese are able to get away with manipulating their exchange rate to the tune of $3 trillion in acute relation of reserves without he called out. while you may argue with the way trump does it, but certainly what he does is what any serious economists would say. the e -- the balances have to be corrected. i returned from beijing, and i believe the chinese understand the underlying to nymex. you will see them -- underlying dynamics. you will see them cave in and rump.modate te this is one area ryan surprised there is not more support for what you is trying to achieve. caroline: this seems to have been a conciliatory tone. what go about lack of new policy? give us a lot of discourse coming from the chinese president, talking about

expanding intellectual property expansion but there is no policy needed from your perspective? david: we have a complete policy vacuum as far as the global financial system is concerned. the imf is standing on the sidelines with no lead. you have massive imbalances with europe absorbing" and the europe andurope absorbing imports, the chinese have a currency that goes into the u.s. there needs to be a multilateral approach. that i am -- i thought the imf for not taking the lead tear. i do not think the chinese buying the u.s. debt is an issue. the u.s. had the upper hand. from madameneed

lagarde out of the imf spring meetings -- tom: what do you need from madame lagarde out of the imf spring meetings? david: i would need herdavid: japanese, and americans, and maybe the two nafta countries and say, these flows are not sustainable in the long run. whether you like it or not, the u.s. voting population will not allow you to hollow out new us manufacturing. economists will say trade is great, and it is, but there has to be some balance or you will get resentments and that will blow it away. tom: we will have to come back. i do not went to cut you off. we have huge news flow. we will come back with david folkerts-landau and continue the discussion on imf and international trade. coming up, jonathan can ski.

ky.krins this is bloomberg. ♪

♪ get the bloomberg business flash. more fallout from u.s. sanctions against the russian billionaire. glencore says it will not go ahead with a plan for shares in and of the company. the justice department has removed the last major roadblock to the biggest deal ever in the cross chemicals industry. regulators approved the takeover

of monsanto, according to the wall street journal. the companies reached an agreement that resolves concerns the deal could hurt competition. in germany, airports are being targeted today by striking public-sector employees. more than 800 of the 1600 flights are impacted.the are demanding a pay raise for 2.3 million government workers. tom: thank you. this is the first essay from someone qualified on the historic moment yesterday of an fbi raid at the regency hotel on park avenue. of course, the home of mr. cohen. lawyer,r lawyer needs a it is usually a bad sign. the investigation is not directly related to the robert mueller probe. a search warrants, unlike a grand jury subpoena, requires prosecutors to go before a

federal judge to demonstrate probable cause that a crime has been committed and evidence of that crime can be found in the premises to be searched. absolutely extraordinary from eliason inndall the washington post. kevin cirilli did not see this coming, like me. what did you think and what was your reaction when you saw those headlines yesterday? kevin: good morning. ended, ie the campaign try to focus on policy reporting that this is really interesting. i spoke with roger stone. i was communicating with him after this went down. time toghts were it is fire the fbi director. on the flip side, you have president trump last night following reports of michael:'s, ,is person -- michael cohen

saying this is a political witchhunt that has gone on too far. it was a fascinating 24 hours. you have the developments of a n, theoe -- michael cohe situation in syria, and the ceo of a tech company doing one-on-one meetings with regards to cambridge analytica. it was an intense news flow. thatwhat is the likelihood in that raid, the federal bureau of investigation got possession of mr. trump's tax records? kevin: great points, i will not speculate on what they did or did not get, but this was in the zeitgeist here in washington for quite some time, which is, let's take about this. the stormy daniels' step is a shiny object but at the same time, it could ultimately be, and is looking like, a legal

fishing expedition -- pfishing expedition. tom: they had to go before a federal judge. the distinction i am seeing in the media this morning as that this is before a judge to have this action by the fbi. how will this change mr. trump's approach to the russian investigation and mr. m ueller? kevin: i think it allows them to dig deeper and go past the red lines the frustration set up a solution, which they have consistently said there wasn't any collusion, but they feel they are going well beyond that into this most dealings. you mentioned tax returns, this is beyond collusion, which president trump has consistently said there's no evidence of. caroline: fascinating, thank you. let's turn to david

folkerts-landau at deutsche bank. you look at ramifications and how they affect economics. does this affect it? david: yes. i believe it is in the equity market, widely distributed and held in the u.s., so anything with an impact on equity markets seems through into growth. caroline: futures are up. david: i think the chinese interpret that as positive. was u.s. is weak in china is strong, which we got therong, so now it is chinese pulling back and going to a normal negotiating position. i think the final outcome is -- you suggested this -- will be the u.s. will get a good deal out of this. the chinese will give in on this.

tom: i have got to get you in on this breaking news. this is one of those team leaves we know can happen -- tea leaves. a ruble planned bond auction for tomorrow, that is one of those little tea leaves, where foreign-exchange says all. please -- is your team at deutsche bank shaken by the over two standard deviation weakness in the russian ruble? david: knocked at all. -- not at all. i believe the sanctions got to the heart of the russian power structure. russia is all about 20 to 30 people around putin who have a strong claim on national well -- national wealth. much of that is held outside. if you go after that, you go out to the nervous system of the power structure and that hurts. it shows up in all areas. rates, issuing, interest

exchange rates, and i don't think we have seen the worst of it yet. i also do not believe the russians would react strongly. i think they will react but by and large, they know they are the mercy of global capital markets run by the u.s. ability to cute them off in many ways. tom: very good. francine lacqua is on assignment in paris, speaking with the saudi arabia of leadership on to their sovereign wealth fund. live by: we are joined the minister of energy of the kingdom of saudi arabia. thank you are speaking with us. you are here to sign deals. how much are they worth? >> total is a big investment.

they are of one of our largest refineries and we have perspective projects to make it into a major chemical industrial complex. in addition to the 5 billion that they will invest, there are evaluatedwords of projects outside the main investment, so that is one. there also retail projects and other sectors, as well. francine: and you expect the money straight away about the delayed by quarters of years? >> it is always about getting disability done, -- feasibility but it has been allocated by the ministry, so there is capable pete stark. to make this another building

block of what will make it one of the more sophisticated industrial complex in the greater kingdom of saudi arabia, not only to primary chemicals tertiary,ary, advanced material, that will make saudi arabia attractive in manufacturing locations around the world. francine: you have been on a three-week world tour with the crown prince. what question do you get the ont from investors, isn't saudi aramco or opec related? >> all of the above. there was a lot of excitement about the vision in 2030. leaders, investors, and the global community, and the media around us are excited. wherever we go, they are trying to understand the vision and

destination and the way we are doing it. and the speed with which decisions are being made is also exhilarating to us within the government and their partners. so a lot of deals have been initiated. a lot of discussions have been fruitful in terms of realizing elements of vision 2030. like you say, aramco is the big elephant in the room, so wherever we go, it has come up and we assure people that we are and thatand on target company shares will be listed and will be listed international investors will be the biggest participants. francine: this is saudi arabia or elsewhere? >> saudi arabia for sure will be the anchor exchange, and we are

actively considering a number of exchanges. we will let you know when we alsoe and the time it will our perspective because we want to make sure the markets are ready --best perspective because we went to make sure the markets are ready. francine: are they definitely here to stay? >> we are going to push it continue stewarding the markets to maintain stability. we believe the success we have achieved since 2016 is something that is hard-earned and something that has to be retained. if retaining it means extending the cuts, we will consider it. i am not the one to decide unilaterally. there are 24 countries and their

needs to be consensus. we have access to consensus and great success in complying to the levels that are unprecedented. i want to maintain that unity and we hope to attract more participating countries as our success brings stability temperature markets and benefits consumers and producers alike. i am going in a few hours to india to attend a meeting with consumers, producers, and we will have that dialogue next week. we will have the joint ministry monitoring committee in saudi arabia," the hosting key producers in the kingdom of saudi arabia as we continue to monitor markets and decide what to do. be assured that we are going to

respond toibly and what the market needs. if they need extension, we will advocate for that. if they need more supply, we will advocate easing and supply at the right time, but the hard-earned stability will be maintained. francine: that would be in case, for example, sanctions against iranian oil? >> that is a hypothetical question and there are other scenarios that could cause disruptions. if we feel the markets are squeezed, we will be quick to respond. francine: on your nuclear reactor bids, have you had an and of a front-runner i when we announce it? >> we will announce it in the near future. the process has not been completed so i am not liberty to indicate who they are, but we have a competitive field. all major providers of technology have very responsive

to our request for proposals. francine: thank you for your time, energy minister of the kingdom of saudi arabia. with that, back to you in new york. tom: thank you. terrific news flow, your morning briefing with taylor riggs. taylor: the chinese resident is driving down tension with the u.s. over trade. he addressed a number of the president's complaints today, promising better openness. >> i am confident that with these efforts, china's financial sector will be much more competitive. our capital market will continue and ourop healthy market environments will be greatly true and intellectual property rights will be protected. in short, china will enter a new phase of opening up.

beijing filed a complaint with the wto, challenging president trump's tariffs on steel and aluminum. they have 60 days to settle the matter on their own before a wto probe would begin. president trump's personal attorney is said to be under investigation for possible financial crimes. the fbi agents had rated the office and home of michael cohen. according to the washington post, they seized records in relation to the $130,000 in hush money paid to stormy daniels. robert mueller referred the case to prosecutors in new york and they got a judge to approve the search warrant. president trump called it a disgrace. the trump administration wants congress to cut domestic programs part of the spending plan sign last month. democrats agreed to a boost in the military budget for an increase in domestic spending. some republicans appeared reluctant to below point of the

few bipartisan deals that have made it through congress. and mark zuckerberg will tell congress today that the social network's problems are his mistake. he visited day before he testifies before a house committee. zuckerberg will say that facebook does not do enough to prevent fake news, foreign interference in elections and hate speech. global news 24 hours a day powered by more than 2700 journalists and analysts in over 120 countries. i'm taylor riggs. this is bloomberg. tom: in the last few moments we have seen new weakness in turkish lira as well. one thing that is for certain is europe is complex. insaw it in the election hungary. a huge landslide victory. a statement by the hungarian. in italy of course the challenges of a coalition as we saw in germany. a student of europe with deutsche bank. the economic pmi's and the noise

of europe seem to be rolling over. this is as good as it gets for a new, better europe? >> yes indeed. i believe european growth is at an inflection point. i don't think it's going to go south but it will level loss. it definitely is an inflection point. i think the election in hungary is rather interesting. if you watch the news by :00 in the evening the commentators were still thinking that perhaps there would be an upset victory for the opposition. far removedhow how from the day-to-day workings or thinking of the european population the news and the eu tends to be. i think the two thirds majority is a serious indication of the problems in europe. likewise in italy of course.

we are seeing a push in a way of the social democratic center. the social democrats across europe would be reduced to below 20%. that creates a real vacuum that has to be filled. right now it is being filled on the right. the center isn't really there. dogmasn't have a clear and policy proposals that are generally acceptable to the population at large. we tend to go around talking down to the people that vote for the five-star movement in italy but i think that's a mistake. we need to change and understand what motivates these people to go for the right 50% and that's the real challenge. great say this with respect for your support of institutional meetings of the elites. how to the elites respond to what is clearly a set of culture

wars of these clashing civilizations? what did the elites do? it's not just go to another imf meeting. what can be the elite response to these culture wars? >> what it is is ahead in the sand if i may put it that way. this is all an aberration -- there is still hope out there that this is all an aberration. that the five-star movement is going to go away. i think that's fundamentally flawed. the layering in this sort of top progressive liberal versus everybody else is extremely dangerous for the next 20 years of politics around the world and we haven't seen the worst of it yet. what needs to be done is very quick trying to understand what the grievances are, how to deal with them and how to create a new political script.

and we are still very far away from that. that is a challenge unmet until now. this election in hungary is a real issue. last night on the main german tv channel it was the number six item after a lot of other items had come up and that kind of shows you is hasn't even sucked into the main consciousness of how important this is. it's important from the politics perspective. what are the economic elite meant to be doing? mario draghi has given a very easy situation for europeans. at some point the politics get even tougher. >> yes indeed. the issue here of the differences within the eurozone you have the periphery and the theer and you need to find

that willnges equalize the competitiveness there. ecb with itsthe negative interest rate policy has done a fair amount of damage especially if you look at the financial system which is the ultimate provider of credit within europe. to run a universal bank in the u.s. is like taking candy from a baby. to run a universal bank in europe is like taking a banana from a 700 pound gorilla. it's incredibly hard tax in part to draghi's negative interest rate which is beyond any dogmatic policy. it doesn't serve an economic purpose anymore. >> you said politics in the u.s. does affect the markets. your colleague is saying italian

politics won't cause market turbulence. to you expect the dangerous situation you talk of in politics in europe to have an impact on the market yet th? >> the shift from a social democratic europe to a right of center europe, what happens in italy in terms of coalition formation is i wouldn't say irrelevant but it won't have a big impact on markets. what would have an is if this inflection point is in fact a liveng point, italy cannot and sustain its debt levels with growth rates that are under negative or much below 1%. that's the problem. is sort of ok. if this drops off then we will have a revisiting of the old sovereign debt problem with the banking problem and we will be back in crisis terrain. but not now. that is sort of looking more

into the future. tom: i want to come back to the united states with the historic news flow that we have out of washington. can the president make america great again when your team looks at the sustainability of u.s. or -- the president sets 3% even more. i didn't see that in the cbo report yesterday. i'm probably in the minority of my colleagues. i believe that while the tone and the way of doing things might not be the most , the policy to himself trump will do much to enhance the stature and power of the u.s. and its role in the world over the next decade or so. immigration being another one. you cannot run a country with 11 million illegal immigrants.

you go through all of these issues and you abstract from the tone this doesn't sound so bad. problem is more in implementing these things and cutting through the politics and get the underlying cause. i think by and large what he will have accomplished by the end of his tenure is something that will be positive for the u.s. the direction of travel is not a bad one. it remains an issue. i think a trillion dollar deficit by the end of 2020 is a real problem. that is something that has to be dealt with that you can look at entitlement programs and kill this within a manner of years. tom: thank you. we are going to continue.

caroline hyde in london. i'm tom keene in new york. ♪

tom: caroline hyde and tom keene. francine lacqua in paris. and the of syria continued military possibilities. distraction from mr.

cohen's fbi raid last night. and they well-suited mark zuckerberg is darkening the door of capitol hill. maybe they and most certainly their staff have looked at bloomberg is this week. very quietly on the cover is volkswagen. is a smally inside matter involving mr. zuckerberg and involving facebook as well. read a little bit. they go out and find the morons for me. she has called me a more on for over a decade. we welcome carol massar. this is quite a read a little b. they go out and find the morons for me. story that is obvious but it's not. >> this is about getting more transparency about social media. zeke fox.ng in

>> affiliate marketers are middlemen who buy ads for products they don't own. amazonuld be products on or in a lot of cases it's a scam like a diet pill that doesn't work or a brain felt that promises it will make you a genius in a minute. all sorts of expensive things that built consumers out of their money. let's bring in the facebook picture. what's the facebook connection with affiliate marketers? >> all these affiliate marketers get together for conferences. i went to one hosted by messageboard called stack that money. they are all there talking about their scams. onstage it certainly appeared like they were a sponsor of a conference were these saleswomen from facebook. saidffiliate marketers that facebook salespeople would encourage them to spend more money. i got taken on a matchbook

and the matchbook cover was a scam at the time. go after the police to the scam artists or the police to go after mr. zuckerberg entity new technology distributor of the scam? >> facebook has never been held responsible even when these scammers have been caught. tom: who's going to go after them? local police? the fbi? >> i think this will be a good thing for congress to ask mark zuckerberg about. platformeated this ad that is so powerful the scammers say it has revolutionized the game for them. they don't need to figure out who to give the matchbook two. facebook figures out you are the most vulnerable person -- gullible person and just shows you that ad. >> they are very serious and there is a lot of money

involved. is facebook complicit? were they aware what was going on? >> facebook says we don't want these guys on the platform. we don't want to make money from malicious ads. they have a whole department trying to catch bad advertisers and stop them. at the same time the bad advertisers say we love facebook, we couldn't do what we are doing without facebook and there are salespeople out there helping us do it. tom: the protagonist in this work was running a free iphone ad? one of my various children showed it to me. we can get a free iphone. >> its ubiquitous. they are all over the place. >> these are scams you pollute the whole internet. you think who would even fall for that but it turns out there's big money in it and there is sort of this club of guys who have all gotten rich quick renminbis scams. >> how much money?

it's hard to say. one crew of affiliate marketers running sketchy ads in san diego was busted last year and they had taken and 170 $9 million using fake endorsements from celebrities like dr. oz. one.s a really popular we've got mark zuckerberg at capitol hill saying how much they are looking to sacrifice profit to help detect privacy. what are they doing to help protect users against scams? last year they hired a senior guy and put him in charge of their department that stops these bad ads and he says he has made a lot of progress but winter is coming. but may be partying now it's not going to last and they are going to stop all of these

bad advertisers. >> the other situation is kind of a whack-a-mole situation. they can find other ways to access facebook. >> they say that facebook is such a good platform to exercise that they will do whatever it takes to get on. facebook's revenue is $41 billion. how can they police such a vast platform? to go back to where are the police? where are the people to go after facebook. to go after these scam artists? seriously? >> the people responsible for it are the federal trade commission. i am told they don't have the resources to stop all of them. tom: thank you so much. we are going to get that matchbook out. get free something as well. a lot more on technology and facebook are it will do that today as mr. zuckerberg heads to capitol hill for some interesting testimony.

caroline hyde and others leading that coverage for us. here.l continue lots to talk about this morning. there's mr. zuckerberg. he looks dapper. he needs a bowtie. this is bloomberg. ♪

>> this is bloomberg surveillance. i'm taylor riggs. ats another setback for uber the european union's top court. eu judges have rejected a challenge to a law that allowed criminal fines to the top manager in france. it affirms a previous decision likeuber should be treated a transport company and not the digital service provider. the new ceo of deutsche bank says the bank needs the help of u.s. clients internationally. in the u.s. isng key for serving german clients abroad. gone all green. the company says all of its sites worldwide are being powered by clean energy from data centers to retail stores. apple has renewable energy

plants around the world. 15 more being built. look at single best chart right now. we're going to look at the dow in the moment -- in a moment. colleaguet as if his briefed the cbo yesterday. this is the backdrop to your work. this is not infirm payrolls back 30 years and it's an extraordinary statement by cbo. here's the average before the crisis. theme isartners major the struggle of the animal spirit. of nominal gdp. folding your market study out two years, three years, four years with the idea that cbo says job formation is going to not be there. our earnings going to be there?

interesting thing about what we are looking at is we are much less concerned with what the fundamentals and the backdrop is saying and more concerned with how price reacts to that and i think we are seeing that now. earnings are still pretty solid. there is still a good fundamental underpinning. the price action is so much different than it was three and six months ago. there's this tug-of-war and violent indecision and that tells you something is changing under the surface. tom: let's bring up our single best chart for jonathan krinsky. day moving average. how does a pro like you interpret the media's certitude of the 200 day moving average? is very important. we measure the slope of the average. once you begin to test the moving average the initial test

acts as strong support. it's almost like if you are jumping on a frozen pond. the more times you jump on it the less likely it is to hold. four times now. >> we are under the assumption that if we test it again -- ultimately it probably does break for the downside. i think you need that final flash before you can resume higher again. aroline: futures pointing to percentage point increase. one needs to happen, what news flow? i think it's the reaction to that news flow that's more important. we saw a very strong open and rally in the morning and it quickly faded into the close. the issue for the market is that

there's a lack of leadership. tech was such a dominant force in the market rally. netflix that and close to 30%. if we don't have tech leading was going to bring us higher in the market? looking for singles within the new volatility the violence that you talk about what should the average person do as they look at the day-to-day swings? at the 200look moving average and the slope of it. the slope is still positive right now. tom: i want to show that. bring this up here. this is the first derivative -- we are doing newtonian calculus for all of you at washington university. the first derivative of this slope is still positive. if you still have a rising

200 day moving average you're going to be ok being along that market. and that'solls over when you start getting into trouble. every bear market starts with a 200 day that does start to roll over. with thethan krinsky seal of approval from partners. the news flow is just extraordinary. for the day.ith us caroline hyde onto technology. thank you in london. foreign-exchange right now, lira, ruble. ruble weaker. 4% move. dollar ruble. this is bloomberg. ♪

>> will enter a new phase of

opening up. alix: president xi jinping columns the markets talking about a new phase in opening of china's economy and avoiding a cold war mentality. protections over profits. mark zuckerberg testifies on capitol hill with a laundry list of actions facebook will take to secure user privacy. is it enough? lose $16illionaires billion on monday. david: welcome to bloomberg daybreak: americas. i'm david westin alongside alix steel. guess who's going to the capital? alix: all of the action overnight was in china. by the afternoon it's going to be all on capitol hill. how angry are these congressmen going to sound? david: they have to make a lot of points with their constituents back home. i can't remember the last time