francine: tpp turnaround. president trump floats rejoining the trade pact. .ejoining vw, herbert diess and a big day for the banks. jpmorgan, wells fargo and citigroup you governing season for financials. volatility will be in focus. ♪ good morning, everyone and welcome to bloomberg surveillance. i am francine lacqua in london. these are your markets, little bit of a rest by when it comes

to equities, gaining some 0.1%, but we have had quite a week. we went into monday, worrying about trade tensions, tariffs, a possible trade war with china. then we moved on to tension surrounding military strikes in syria. we have been throughout this time talking about oil. we are just getting news from the iaea saying opec is near mission accomplished as the oil glut vanishes. we have concerns over the price of oil. nymex,il, over on the 67.7. i would point to the euro-dollar, a little bit of where the volatility was this week. coming up on bloomberg surveillance, we talk trade, markets and central banks, which have more than 400 billion euros in assets under management. a guest fromrning,

barclays. also, one of the biggest voices from the commodities space gives us his outlook for gold and money. let's get straight to the bloomberg first word news. reporter: he was president donald trump met with his national security team yesterday to discuss america's response to an apparent chemical weapons attack in syria. saidcame as theresa may's it is vital to respond to the incident. it suggests britain is prepared to join trump and macron if military strikes are launched. china's overseas shipments posted a decline on seasonal fx over the seasonal holiday. after a gain2.7% in the previous months. by 14.4%,creased leaving a surprise deficit. aluminum is heading for its best

week since at least 1987 as investors and the global industries battle with supply disruptions after the u.s. imposed sanctions. prices on the london metal exchange are up 12% this week after surging to a six year high. the sanctions on the biggest aluminum maker outside china with alled the market, parts of the supply chain rushing to assess the risk of handling the company's metal. qatar has raised $12 billion in the first dollar bond sale in two years. that surpasses saudi arabia. the sale comes as the middle east security risks ease after donald trump hints that military action into syria might not be evident. slovakia's prime ministers that his country is prepared to contribute more money to the prim european union. he made his comments during an exclusive interview with bloomberg. >> slovakia is a member state.

it is prepared to contribute more to the eu budget. we're prepared to increase our to 1.2% ofn to 1.1% the gdp. whaturse, it depends on will be the position of the other member states. reporter: james comey has likened donald trump to a mafia boss. presidentthat the waged a monthlong effort to secure the loyalty of the then fbi director after taking office in january. behavior similar to that of an underworld leader. alsolso -- he expresses some regret over the handling of the hillary clinton investigation. global news 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries around the world. this is bloomberg. francine: thank you. withlet's kick it off trade any markets. president trump has directed

officials to approach rejoining the transpacific trade partnership. he also expressed optimism on the deal with china, a change of tone that boosted sentiment in the market. unclear to what extent his comments represent an actual shift in policy. what does the changing rhetoric mean for the market? joining us now is stephanie baker, who has been following the trump administration from the beginning. joining us,, the head of g10 fx strategy at bank of america merrill lynch. thank you for joining us. stephanie, we speak every day because every day in the last 24 hours there is a lot going on. first of all, what do we know with trade? stephanie: he has reiterated a statement he made in davos, saying the u.s. could rejoin tpp if they got a better deal.

this has reopened the trade war ofsue after this words with china. it appears the u.s. is not making much headway striking a deal with china, which makes another reason for him reopening this possibility of returning the tpp. however, renegotiating the love be easy. we have already seen some japanese officials, they are not keen to renegotiate. japan has taken the lead on pushing that agreement ahead with the remaining 11 members. so, they were hoping to get all the countries to ratify it and put it into course by 2019. renegotiating will delay. francine: i want to spend a little time on trade with japan. it was in the initial tweet from president trump. we have a great chart on youtv .

you can steal them, use them, modify them. this is the trade picture with japan and the substantial deficit. the white line in the middle is the long-term average. stephanie, before we talk markets, overall, what did we learn this week? we go into monday, talking about the syrian airstrike. we have a tweet from the president saying, watch out, russia, it is coming. then he says, we are not doing military action in russia. now he is talking about tpp. do we need to believe the tweets less? stephanie: perhaps and because he says he wants to reconsider tpp does not mean that will happen. just like this week we saw his tweet about missiles coming with syria, that has not happened yet. i still think syria is obvious a very tense situation. and the longer the u.s. ways to take action, i think the less

effective and airstrikes would allows assadt it and russia and iran to prepare. it has been a week of chaos of tweets that do not comply with previous u.s. policy. it just adds to this notion that there is a sense of unpredictability about the trump administration, which people are struggling with. francine: is a trump tweet a white house policy? how does that impact your models and research? >> i don't know about the model there. president trump is never scared of disruption. getting rid of tpp is one of of his first acts int he job. now he is talking about coming back. francine: he wanted better deal. >> but i think he is using that as a threat against china. the reality is, during those

will have some very negative and aggressive statements and occasionally some warming up. likeieve that he knows, everyone, that trade wars are lose-lose. each ends up in a weaker position. it is a nobody's interest to get this flaring up. negotiation times. you will have good news and bad news, but our core scenario is this will not escalate into something terrible. francine: simon, do you agree? let me bring you over to my chart to talk about your world of fx. this is another great chart, i am plugging btv, but you should check it out. this shows volatility across all asset classes and it has declined to the lowest since

january and then he went back up. overall it implies that the risk-on carry trades are still there. simon: markets are definitely confused with all of this noise. the question is, what's the end game here? the fact is, at the end of the day, the us must decide what they will do with nafta and china. despite all of this noise, we are going to have some decisions that we have to make soon. flip-floppingthis is a negotiation tactic, it does need to change. a trade war would be very catastrophic for markets. for now, the market cannot ignore all this noise. francine: they are, aren't they? to a large extent, they are ignoring it. is this because they do not know how to price it? or is it because at the end of the day they think the president does not want a trade war?\ innos: they are ignoring it

the sense that volatility has not increased within the fx market. but it is keeping the markets away from taking a directional view. in my market, the dollar should have been much stronger, givebn the hawkish space. but that has not happened. francine: when you look at your research, what does it mean for asset classes that can move on the back of everything we are wseeiseeing. >> i agree with the rise in volatility. we have the trade war, geopolitics. fundamentally, by some measures, the fed is entering into slightly restricted territory. our research shows that when that happens, volatility increases. in rates, in equities, and also, the correlation between baonds and stocks increases, which is not good news in terms of diversification. that leaves investors to reduce risk and leverage.

so, yes, we are entering into a more difficult phase for the market is unusualsaid, it for stocks in the u.s. to lose more than 10% outside of a reces sion.w we have seen that this year. means to break below 2600, but i think many will say that as a buying opportunity. we are quite positive for a stock, especially in europe, not so much in the u.s. francine: we are still on trump tweet watch. usually around 6:00 a.m. new york time. i guess it is also what the allies say on syria. >> the main thing to look out for is what they decide to do with syria and what is the timeframe? do they wait for the weekend and what kind of negotiations happen behind the scenes with allies? francine: thank you so much, stephanie baker.

vamvakidis and vincent chaigneau stay with us. bloomberg users can also interact with tv . , friday the 13th. year?bout the u.s. 10 we talk bonds and fed, next. ♪

francine: economics, finance, politics. this is bloomberg surveillance. reporter: london's stock exchange group has hired david wimmer to run the 217-year-old

board. august.join the join in he takes up one of the most high-profile jobs in the city of london. he replaces david warren, who will retain his role as cfo. sage group sent growth will be hit by a decline in revenue and drop in sales. this causes shares to tumble. as a result, 2018 full-year guidance has been revised to around 7% organic revenue growth. toes currently transitioning a subscription model, attempting to get new customers to purchase new products. donald trump has ordered the creation of a task force to review business processes at the nine states -- at the united states postal service. this could affect amazon. the postalo this, service has lost $65 billion over the last decade, as americans increasingly send

messages online. that's the bloomberg business flash. francine: thank you. let's talk the central banks. the ecb is finding out how tricky policy talks can be. the account of the march meeting couldned thatt tariffs hurt all countries. they still remove the pledge to ramp of asset purchases. in theussed the hikes march meeting. they discuss hitting the inflation target and the growth outlook strengthening. how should investors the positioning themselves as the largest central-bank pullback from policy measures?. vamvakidis and vincent chaigneau are still with us. is there a danger the u.s. economy is overheating? >> absolutely.

data has been very good, given that q1 tends to be negative. that will improve going forward. and we are looking at stimulus, which will affect the economy in the quarters ahead at a time when the economy is already volatile. and the clear message from the hikes aret more coming. the dollar is not already stronger, given all the signs pointing toward risks. francine: why is it not stronger? has not fullyrket appreciated all of these factors. the market phillies the fed is close to the end of the hiking cycle. the fed disagrees. central have seen banks selling the dollar. this started after the french elections. it has continued this year. this will determine if we get more policy and the data

improving. these flows will then start shifting towards the dollar and this will allow the dollar to do better in the quarters ahead. francine: is the main risk monetary policy, from the state of the fed, or are we beyond that? vincent: at some point, there is a risk of a booming scenario. i agree that the fiscal policy is a very important element here. something very unusual. never before has fiscal policy process-like. when we have very low capacities in the u.s. you have that stimulus coming up. that might force the fed to be more aggressive. the fed has become preemptive. it was reactive and now it is more preemptive. this all started when deadly, d,- when dudley, indee started talking about the risk of overheating in 2019 to 2020.

francine: what does that mean for treasuries? and if this does not mean data dependent -- i feel like you are saying, they are more reactive rather than forecasting, that puts you in a tighter spot, when actually, you are looking at the data. the inflation in the u.s. has picked up. wages in particular. there has been a lot of talk about the steep curve. that wages are reacting to the tight labor market. if you look at the core pc inflation also, that has picked up a little bit. that has picked up. the surveys tell you that there is more pressure in the pipeline. again, the survey this week along the small and medium sized companies support that view that inflation is picking up. i think that's why the fed wants to tighten moe. -- tighten more. but they will be watching the impact of financial stability

because eventually there is a risk that the fed tightens too much and eventually, that precipitates the downturn in 2020. francine: where do you see treasuries? thanos: the 10 year are too low at this stage. the market has not priced the for 2019 and 2020. francine: is there more of a danger with the european central bank or the fed? currency unravel, or go too high? preemptive.s still they are moving very cautiously, as long as inflation is so low. around core inflation 1%. this week it was said that potential growth could be higher than expected.

that means that there is more slack in the economy. as long as inflation remains solo, that tells the ecb there is slack in the economy. though, evne ther4e, the market is more cautious. the market will not the 0% before spring 2020. that is not a lot. i think there's room for that to move higher. francine: the euro-dollar? >> we believe it will weaken to 1.15 by mid-year. however, the market believes the already, which we do not believe to be the case. 1.15 is our projection. francine: vincent chaigneau and thanos vamvakidis both they with

us. volkswagen has picked a new leader in a shakeup to ready the world's largest automated carmaker for a wave of automotive change. herbert diess will become chief executive, as well as overseeing tech. we are now joined by matt miller, the anchor of the european open, frankly one of the people in the news knows the most about cars. he's at the vw he adquarters. good morning. why a new chief executive and how can we tell if he is the right man for the job. matt: why is the best question today, fran. because matthias mueller has been doing quite well, he had gotten margins up to an enviable level by any standards for a global automaker. certainly for the biggest automaker in the world, which volkswagen have become under his leadership as well. cash flow was great. he just announced a new $50 billion investment program for

electric cars. it seems some on the board were not happy with his delivery style, with maybe his english skills. he had gotten into a couple of lawsuits because of some mistakes -- speaking mistake that he had made and gotten into a little bit of trouble with the german press because of some gaffs he made with his 10 million euro salary. wednesdayto a head on and the company hurriedly put out a press release saying they would switch ceos. investors agreed that with a real load of optimism, bringing the shares up more than 5% on wednesday -- they were up 2% yesterday and they are up again today. it seems they are definitely behind herbert diess. francine: what can he do differently and how quickly will he do this differently? matt: well, one thing he is famous for is cutting costs. he used to be the purchasing manager at bmw. after he took over that role, he

managed to save the company 4 billion euros. he was very good at that job. when he came here after the diesel scandal, it should be noted. he is not tainted by the diesel scandal at volkswagen. he came to an agreement with the labor union that reduced the workforce by 30,000 people. that's a very difficult job to do, especially at volkswagen because remember, it is owned 20% by the state of lower saxony. there is a huge representation on the board of labor unions and the state ownership makes it very difficult to reduce the headcount, yet he was able to do that and the labor union leader even put out a letter today saying that they are very much in support of him as the new ceo. seconds, matt in 20 does it have any impact on their competitors? mean,um, well, i volkswagen is investing more money than anybody else to try and be the leader in electric cars and with that much firepower with a ceo like that

it looks like they have a pretty good shot at taking that title. francine: great work. thank you, matt miller, anchor of the european open. still to come on bloomberg surveillance, a big day for the banks. jpmorgan, citigroup and wells fargo all release first-quarter earnings today. and then we try to figure out what volatility means for equities and currencies. this is what i'm looking at. u.s. futures pointing to a higher open, but we are looking at a subdued market this morning. this is bloomberg. ♪

francine: economics, finance and politics. this is "bloomberg surveillance." let's get straight to the bloomberg first word news. mrs. k.d. lang.

>> donald trump met with his national security team to discuss the american response to a chemical attack in syria. that came as theresa may's cabinet said it is vital to respond to the incident suggests that written is prepared to join trump and emmanuel macron. donald trump has directed officials to explore rejoining asia-pacific trade pact team. the move comes a week after the president escalated tensions with a threat to impose threats -- with a threat to impose tariffs on chinese products. we have deals with six of 11 nations in gdp and are working to make a deal with the biggest of those nations, japan. china's overseas shipments saw a decline on the chinese need -- new year holiday.

a 44.5% gain the peter's month. -- the previous month. 4.89 billionit of dollars aluminum is heading for its best week since 1987. global investors and the industry supply -- battle with supply disruptions. prices on the london metal exchange 12% after surging to a six-year high. all parts of the supply chain rushing to assess the risk. qatar has raised $12 million in its first dollar bond sale in two years. that surpasses the neighbor, saudi arabia. the sale comes as the middle east security risk eases after donald trump says military

action in syria may not be imminent. former fbi director james comey has likened donald trump to a mafia boss in his new book. presidentms that the waged a month-long effort the alliance -- the allegiance of the former fbi director. comey express is some regrets over the handling of the hillary clinton email investigation. -- expressed some regrets over the handling of the hillary clinton email investigation. global news, 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries. francine: we are getting a little bit of news. we are walking into give a news conference. we were speaking on the ground to matt miller who is giving us the lowdown on some of the concerns for vw. it is one of the first times that investors will be able to .ear straight

we will keep a close eye on that and bring you any highlights on the car manufacturers plans. earnings season is back. u.s. banks is due to report their first-quarter numbers today. jpmorgan's first, then citigroup and wells fargo. that brings volatility back in focused. joining us -- back in focus. -- we will talk about the market implications. banks have said they need volatility to get trading profits back up. do they have it is mark >> -- have it? >> of course volatility is good for banks. however, if volatility -- however, volatility is very jarring. there's really a dearth of any big swing. that can put clients on the

sideline as a wait and see a clear message before they are willing to jump in. volatility is going to be a focus especially if we have a flatter juncker. flatter euro is good for banks. what we seeing in terms of environment overall. dani: taxes, taxes, taxes. that is all we heard from banks this previous quarter. there is more elector environmental things -- more regulatory environment of things. one, going to want to see what banks take on that. it -- if they are going to return to shareholders or boost their lending businesses. francine: are we going to hear them talk about trade or geopolitics? some are open to talk about trade is negative to the

earnings. >> the same sort of issue with all duty, is it going to slow down credit lines because corporations are waiting to see what happens before the expand businesses. we have people like jamie dimon. he is not afraid to talk about some of these geopolitical issues on conference calls. there is a likelihood that it uses the call to talk about trade tensions. francine: dani burger is our markets reporter. if we go back -- how do you look at financials? do you look at it through the volatility lens? volatilitypickup and may be should be positive for beks -- and volatility may should be positive for banks. yet the rising yields which is going to continue and that should be positive for banks. which areredit trend

pretty positive so all of that is positive for not just for financials -- or financials. one trade that we would like in europe is to be long as a credit. francine: this is worldwide? -- by the end's of this year, ecb is going to end qe. they will and -- they will end program.rogram -- csbe that will be an important switch for financials. especially if the yields pickup. francine: are we going to see much more volatility in currencies? you haven't been busy enough westmark vincent: -- busy

enough? vincent: there is good volatility and bad volatility. if we get high volatility because of monetary policies, normal inflation, then this is good news. a clear direction of moods -- moves in fx markets as well. if you get volatility because of high inflation, the fed hikes too far, this is bad news. we are in the positive policy trend, so this is likely to go back to normal. francine: thank you so much for joining us. they both stay with us. keeping an eye on what is going on in germany. this is the volkswagen chairman speaking to reporters. what he is talking about is with the arrival of the executive,

they are now on a course for a monument to change. any of our bloomberg customers can follow this conference on live go. monitoringn my side any breaking news out of this. we will be bring that news to you shortly. this is bloomberg. ♪

francine: this is bloomberg

surveillance. that is the volkswagen's conference over in germany. what the chairman is talking about is the fact they appointed this new chief executive, in charge of vw. he says that will set the company for a new course. they are adding a new position. this is at the operational level. there adding that position. they have taken a step back, what the company needs to do before the advance into technology and that is a key position the identified. if you are a bloomberg customer, you can follow the news conference. you can follow also on twitter and we will continue to bring you the latest headlines. onto politics. italy's center-right of line says it was ready to form a lasting government. this as they clashed with anti-establishment during your second round of talks hosted by the president in the quest to form a new government. the french really operator says

they expect one third of high-speed trains and 1/5 of intercity trains to run today amid a strike by employees. repositioninvestors around risk in europe? is therethe concern was nothing in europe because growth is ok, ecb was fine. now we are seeing a little more anxious investors. where they could be very populist. in france, we are just strikes are crippling -- we are -- strikes are crippling the country. strong: last year we had rules but very positive surprises. this year, we have negative surprises. we currently remain solid. the surprises are not in the same direction. you have the political strength

strikes in france, the eu integration discussion is not going very well. not very positive. that being said, we are still in environment of fairly solid growth. very cautious ecb. i don't think we should be too concerned about disruptions around europe. francine: are you concerned that what they don't have control of is europe level? it is unclear whether the ecb can talk it down? vincent: this is a challenge. the ecb was hoping that the fed is hiking, the dollar will strengthen. this will make the job much easier. it is not that the euro is too strong. but it is too early. given that inflation is stuck at really poseshis

challenges for ecb. francine: what does it mean for european integration westmark -- integration? we forget the brexit and we move on. it is taken such a long time for germany to find a government. vincent: we had got -- we had macron only one side and a grand coalition on the other with the spd keener to embrace eu integration. whoever the vibes -- whatever the vibes we get from germany are not very good. it seems the reforms that macron wants to push are not going that well in germany. we are talking about the banking union and the common deposits. a lot of northern countries have cold feet. germany does not too keen, the new finance minister is not too keen. there is the idea of

alsoforming the ef cm -- on that space, some countries went to make sure that any support from the new emf would be conditional to automatic restructuring. some countries like italy don't want to hear about that. on the budget, very low appetite from germany. it seems the francine: german plan which is -- the franco -german plan is not progressing well. in a global environment, that is quite conducive in terms of the economy development. i don't think we should be too worried, but we are wasting time in terms of repairing the next crisis. -- the next time we have a downturn, will we have the tools in place to savor the integrity

of the eu? that is the concern. more structurally, medium-term, what happens when we have an economic downturn? >> are you constructive pound? is at the end, both sides will compromise. this is indeed what we have seen so far. the compromise from the bottom in the compromise on the transition they came in this year. we're looking forward although trade negotiations are going to be difficult. they are going to compromise on a final agreement. not that far from a soft brexit. this should be positive for settling. us.cine: they stay with these are the latest headlines we have from volkswagen. the big news is they have a new person at the top but the share price beginning 2%.

they have a numeral of cheap operational officer as they try to transition -- chief operational officer as a try to transition. can follow that news conference -- you can follow that news conference at live go. ♪ >> in this we are aware. [indiscernible]

francine: economics, finance and politics, this is "bloomberg surveillance." i am francine lacqua. let's get to the bloomberg business flash. >> francine, london stock exchange group has hired david schwimmer to run the 217-year-old board. he will join the group in august after a 20 year career and goldman. he takes a -- at goldman. he takes a one of the highest profile jobs -- he takes up one of the highest profile jobs. sage group has said that growth will be hit by decline in recurring revenue and a drop in sales in its business housing shares to tumble. as a result, 2018 for your guidance has been revived a full

percentage point down. age is transitioning to substitution model attempting to get new customers to purchase new cloud-based products. donald trump has alerted the -- at thef the tax united states postal service. it is a move that could affect amazon. according to the order, the postal service has lost more than $55 billion over the past -- the taskericans force will be led by steve mnuchin or his designee. bitcoin has added biggest december.urst since possible reasons include the end of tax related selling and speculative short investors being squeezed out. bearishness may be fading after -- that is the

bloomberg business flash. francine? francine: now to japan and a gauge of unexpected volatility in the country's bond futures put to a record low this week is speculation that the boj could adjust its target for 10-year yield. this comes as market concerns grow. tomay hamper its ability rein in the nation's debt. how should investors be seeing themselves around 70's assets? markound assets question does the market fall again? -- follow again? >> yen is very much the market focus right now. it hasn't been supported because the market has been expecting the boj do adjust its target. probably because of policy

uncertainty -- partly because of policy uncertainty. the yen has been doing well in the risk off environment. in the short-term, the yen could weaken. we could see some adjustment. it is too early for the boj to revisit its policies. thinking about the medium-term to long-term, the yen remains undervalued. economics, all credibility is likely to weaken. it is a long-term view we expect the yen to strengthen. >> i see thence -- chance of a rebound in the u.s. dollar because there's short positioning in the u.s. dollar still. yen shorts have been reduced quite sharply. the room for bounce in the u.s. dollar, nevertheless what we have seen this year, very

unusual. a complete breakdown between rates and fx, it is very significant and sends a message. the potential for the u.s. dollar is limited. investors know the u.s. cycle is mature. the dollar might bounce back, but the potential is quite limited. as for the doj, they are in a difficult situation. the more they wait, the more it is going to be difficult to exit from the super easy policy, because you will remember there's there's -- remember there's the consumer tax high which will have any -- which will have an impact on the economy. it is going to get tricky for the boj. francine: there's news out of changed --s&p has they must have heard us talking about japan. what is their value for yen? >> at this point, it might be the

dollar yen, it might be overvalued by 15%. definitely in the long-term, dollar yen should be close to 90. as long as monetary policy diverted is very hard to go to this level. the risk of dollar as to the upside, and we might see the repatriation follow the tax reform. -- following the tax reform. -- should we be looking more into political scene in japan? if shinzo abe has to resign, what kind of effect with that have? >> i don't think we are there yet. the key question is who could replace him? he might be embroiled in the scandals, but the plan be is not obvious -- plan b is not obvious.

francine: thank you for joining us today. eye towardn keep an that volkswagen news conference all day. started about 45 minutes -- it started about putting five minutes ago -- 25 minutes ago. basically put the world's largest automaker just much more ready to take advantage of technology. imagine when we talk about technology, they are talking about driverless cars. -- when they talk about technology, they are talking about driverless cars. we will look at treasuries. this is bloomberg. ♪ welcome to the xfinity store.

i can tell you about... streaming the most free tv shows and movies on the go. yeah, and... xfinity internet. it's so fast! and you can save by... by getting up to 5 mobile lines included. whoa, you're good. i'm just getting started. ♪ simple. easy. awesome. 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. francine: tpp turnaround.

president trump floats rejoining the transpacific trade pact, but only if he gets another deal. global market read a sigh of relief. jpmorgan, wells fargo and city citigroup kickoff jumped reports. new chiefthe executive of the world's largest carmaker, herbert diess. this is tom and francine from london and new york. tom, it is incredible, the week we have had, the news flow. it has been up and down in terms of volatility for the would just -- i guess if you wrap up the week, i would take the tweets from the president with a pinch of salt. telegraph drives forward this morning in london, many absolutely livid about the streets. tgeist, secretary mattis,

pushing back against the immediacy of the president's desires. course,: we will of cover that shortly, but first, let's get straight to the bloomberg first word news. reporter: president trump is doing a u-turn on the transpacific partnership. he has ordered officials to look at rejoining the trade deal he pulled out of just days after coming to the white house. last night the president tweeted the u.s. would rejoin the deal only if it was better than the one offered to president obama. china posted a surprise trade deficit last month. imports rose, leaving a $5 billion trade gap. thisw as due to the lunar holiday. it appears that the british prime minister would join the if militaryance i strikes were launched. she spoke with president trump

yesterday. they need to deter the further use of chemical weapons by the syrian regime. and pretty soon, opec will soon be able to say, mission accomplished in the quest to dry up the global oil glut. that is according to the iea. yearutures hit a three high in new york this week. global news 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries around the world. this bloombergis. -- this is bloomberg. tom: equities, bonds, currencies, commodities. let's get right to it. oil, oil, oil, oil. american oil, $67.66. the bull market in oil -- when was the last time i said that, printing? -- francine? francine: there was a lot of focus on oil, we had some iea reports saying the market is

rebalancing and that should make a difference thanks to the production cuts opec put in place. asm also looking at oil, well as stocks in europe, would seem to be adding to this week's advance. there is a promising session in asia. investors taking to heart that there are signs that trade tensions are easing and a lot of focus on what is happening with the banks later on. if you look at the s&p, they are supposed to follow banks. tom: francine, this chart matters. chart, course which is important not only because of oil, but this is the mother of all resistance lines. called kisses. here, kiss there, kiss there, two here. that is a gorgeous resistance lines oil had above the $30

level. francine: only tom would a, there is a resistance line yhsy i gorgeous. -- resistance line that is gorgeous. mine is ugly, but it actually follows the news. tom: oh my word. francine: president trump tweeted that they have bilateral deals with six of the 11 nation's in tpp. that's japan. if you look at this chart, it shows the u.s. trade picture with japan and the substantial but not increasing deficit -- the white line is a long-term addage. tom: very good. it's a real shock. it's like the budget story, it's a secondary story, but very profound to see this rekindling of tpp. francine: there you go, tom. tom: very good. francine: donald trump has directed officials to explore

rejoining the transpacific partnership, which he redrew from charlie after taking office. he struck a more positive tone on china. we are joined by bloomberg's asia correspondent. what does the tpp mean for china? he did make similar comments before? >> he did. in asia, the members of the tpp that went ahead and signed the deal once trump pulled out are cautiously optimistic. they are welcoming the u.s. in. they are not up for renegotiating the entire agreement, or even doing it in a piecemeal fashion. they are really trying to see what this means. they heard trump say something similar in davos in january. we have not heard much until yesterday's comments.

they are really waiting to see what trump wants. what does he mean when he says ?" wants a "much better deal francine: what is this "much better deal" and will it ever happen? who knows? if you look at the u.s.-south korea deal, it appeared trump solved that one right away with some tweaks on automobile quotas and things like that. if it is a small tweak that the look, it can say, suddenly made a great deal, that would be fine with a lot of the members. if you want something more wholesale, that could be a different story. but what a lot of people are looking at is the context of his trade fight with china here and trump, this might be recognizing the strategic value of the tpp in pushing back against china.

tom: daniel ten kate, with us from asia this morning on the president's desire to rekindle tpp. and to remind everyone, secretary clinton and mr. trump against tpp in the last election. it is a joy to have on staff this morning, stephanie baker, as well, antonio garcia pascual of barclays. stephanie, you are definitive on paul manafort. you are definitive on these people surrounding mr. trump. you know the uproar in new york this morning about mr. comey's book. i want to go to the mr. cohen tapes, the attorney for the president. like mr. dean, i guess he has tapes. outcomeou to link the of mr. manafort to the likelihood of the outcome of mr. cohen given the likelihood of these tapes. >> there is no doubt that this rate of michael cohen's office

and hotel room is hugely significant, potentially. they were not exciting this. trump and the white house are not expecting this. what does michael cohen have? how does that change the course of the investigation. we do not know what robert mueller has got. erased by, this was the southern district of york by mueller. this could change the course of the investigation, not only that we understand that they were looking for information related cohen's pay off of star, andartorn former playboy model, but he is obviously sitting on much more. he was donald trump's personal attorney, the trump org. attorney for a decade. he was his go-to fixer on so many issues. he traveled to the former soviet republic of georgia.

tom: exactly. >> he was much more than just a lawyer. he was his go-to fix it guy. tom: what does a grizzled pro like you and all of your investigative reporting to mr. manafort, have you respond when you see the american media talking about mr. cohen "slipping?" how do you interpret that? >> it is very similar to the relationship between rick gates, who worked with paul manafort for years -- manafort was his mentor. it is a very similar, close relationship between cohen and trump. cohen, gave him everything he's got. nobody expected rick gates to flip on paul manafort, but when faced with the full power of the special counsel's office, he did flip. whether or not we will see the

same thing happen with michael cohen remains to be seen. how strong of a case to they have on him? i would argue the doj had to approve this radar michael:'s michael-- this ratid on then's office because of possibility of getting unusual documents that might surpass this client-attorney privilege. they would not have done that in less they had material could lead to some sort of criminal indictment. francine: have we figured outf a little more abou the timeline for a possible strike in syria from the u.s.? stephanie: i think there was an effort to dial back the rhetoric, both in terms of what trump said -- saying, i never said when we would strike, or even if. james mattis also moved back, sa ying, we need to prove if this

was the assad regime. there is a growing recognition that military strikes certainly will not change the course of the civil war in syria and do carry huge risks because of russian and iranian forces on the ground. if they are in harm's way, look under reaction that would result in. daniel: tom: -- this is the z ietgeist in america right now. this comes after the confusing tweets of yesterday. francine: confusing tweets, and if you are a trader on the markets, or a writerr the market was anxious on china. that died off and then we started tuesday anxious on syrian strikes. where are we? where does the market latch on

it? wider thing is the focus. the u.s. treasury managed to put sanctions on the syrian situation. we have got a wider problem in the markets, which we do not know what is happening next. as far as the military strike is concerned, i think people are expecting that something will definitely happen because both france and the u.k. have come very much in line. it is a question of whether it will be more quarter needed and therefore more powerful and longer-term, but in the meantime, the syrian jets have been part in russian airfield and hit it away. that is why the u.s. establishments are less than impressed. francine: i do not know if this changes in easier economic model, but at the margins, it must have an impact. marcus: it should. confidence fits dexo the financial infr

and financial banks. several economic areas, including europe, are going through a soft patch. they are weakening with trade. the markets are going to overreact -- the markets are not going to overreact to news we do not even know yet, but they are becoming more concern for the this is serious stuff. tom: stephanie, while we have you on set, we saw on extended note last night in the atlantic magazine about the future of rod rosenstein. does he make it to monday morning? stephanie: very good question, i would not dare for take that. been -- we know he has been considering firing robert mueller, most legal analysts believe he cannot legally fire robert mueller.

you need to fire ron rosenstein and install somebody who could then oversee the special counsel 's investigation and that person could either fire robert mueller or perhaps, curtail the scope of the special counsel's investigation. whether or not he does that is impossible to predict. he is clearly not happy with neither rod rosenstein or jeff sessions. but he knows the political risk of moving against them are quite high, especially now that you have this bipartisan group of senators moving to restrict his mueller.o fire they want to pass legislation that would make sure there's a judicial review tom:. tom:tom: you are planted in london. help us with the allied effort. why does it sound like three days before the allied invasion.

the allies are behind america like they were not the last time around. are the allies really behind america? stephanie:f i think president macrnon appears to be very strongly behind the u.s. you had macron say he had proof that assad was behind the chemical weapons attack. the u.k. position is a little more murky. prime minister may's perspective, she met with her cabinet and she looks what she would be willing to back it going to parliament for approval, but her situation is a bit more tenuous, especially because she has the slim majority in the coalition and the u.k. parliament. and the opposition leader, her,y corbyn, has mocked saying she is waiting for orders from trump. think that has undermined her politically. francine: this is a viewer

question, so let's get straight to it. asks, does the escalation of any u.s. military action risk extra treasury issuance? >> know, but i think at a but at aoint -- no, e coverageint, the opti ratios were pretty poor. ,t is not the end of the world there are more days with more supply coming, but the longer this goes on without a military response, the longer the market that. assimilate i think the bond markets are in a pretty reasonable range at the moment, will off the 3% level on ten-year treasuries and therefore, it is less and fortune. toit were to back up close 3%, that becomes a much more relevant question. francine: what is your take? antonio, if there is more

military action, does it change at the levels with u.s. gdp. >> not really. >> we will see. itwe were discussing before, is all about confidence, right? what about what happened to trade? nobody is expecting this to become full-blown. still, in terms of issuance, i .ould agree tom: stephanie baker, thank you so much for the briefing this morning. we will continue with mr. pas cual. jpmorgan's earnings are out today. what a pleasure. too big to fail, versus the regionals and small banks. a 46 page letter from mr. dimon.

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reporter: this is bloomberg surveillance. the london stock exchange has turned to goldman sachs for the new ceo. they named the 20 year veteran david schwimer. he has big boots to fill, the former ceo lead, six will rise in the stock price and made lse the largest clearinghouse of the world. investors will learn this morning what the federal reserve's recent interest rate hikes mean for first-quarter results. jpmorgan chief, citigroup and wells fargo report earnings before the opening bell. and that's the bloomberg business flash.

tom, francine. francine: italy's center-right alliance says it is ready to form a strong and lasting government. y is insisting it should indicate a premier. is marcus us garciah and antonio pascual. with the election of macron, thought there would be more integration with germany and now we are seeing france striking. it looks like we could have a very populist government. >> it is difficult to ignore that almost 50% of the vote went to populist parties. the bigger question there is twoher you have only the

populist parties or a combination of the traditional party with the populist party. i think it will be the latter. and i think investors are sitting on the sidelines, trying to understand the policies. -- thehe populace populists have a stance. perhaps the only angle of stability. the fact they are able to deliver surplus, and are stabilizing public debt. 2% of gdp.heat is growth is not really there and reforms are not really there. >> i completely agree. it seems to me the longer this goes on, it is the traditional parties, as they did during the summer, they tweaked the rules to make sure it was harder for the five-star to win. five-star has continued to do

extremely well, but the k,aditional parties, i thin will try to do their very best to keep the five-star out of it. that is what they will try, at and they will have a majority anyway. that seems to be the most comfortable route for the president, who had a very important role here. berlusconi axis is holding together for now. the u.k. parliament wants to be premised are himself. we will see what happens. i think at least the president will allow him to try and see if he could form something. tom: antonio, the thesis here is europe is doing better and italy is doing better than europe. is that true? what have you seen at barclays within the last six to

eight weeks in terms of economic growth or lack thereof in italy? >> i think it is the latter, we ofe seen the wakeakening growth. it seems to have to do with exports. europe and italy benefit from that. it is a open economy, far more than the u.s. i think the initial forces of growth are there. employment is falling. investment is picking up. it depends on what happens with global certainty or uncertainty. engines arehe there. i would say yes, we need to mark down growth a little bit. the underlying growth remains for now, robust. is: to be clear, mr. draghi not on the same path as mr. powell. >> that is right.

look at inflation. actually, let's look at core inflation, underlying inflation. 1.0%. year andp from last probably will go a bit higher last year -- next year. but it is very gradual. growth consensus within the thisny goes to take in slowly, to be very cautious. they had a very unusual issuance notsay, this is the view of th the ecb., francine: very quickly, you wrote a great piece saying redemption was falling. good news for issuers, and investors ignorant. >> the strength of the euro is affecting the economy in euro pe. it is keeping rates low. 60 basisds are at

points and credits field have widened. issuers can say, we are offering the biggest spread you can get on the government. come see our corporate deals. investors are looking at this and it optimally looks better for me, getting a wider spread incorporates. the reality is, the underlying yield is so much lower that the cost went up. before andt period after easter, and now we will see one of the biggest month of the year. tom: marcus ashworth, thank you. we continue live from london and new york, later on bloomberg radio. this is bloomberg. ♪

tom: good morning, everyone. "bloomberg surveillance," from london and new york. we will go to kevin cirilli in the next hour. also, jpmorgan earnings on the backside of the next hour.

right now with your first word news, kailey leinz. trump is shifting his tone on trade. he has told his staff to look into rejoining the asia trade the one he withdrew from. he expressed optimism about reaching an agreement with china and said that the countries may not end up imposing new tariffs on each other. president trump is making a move that could have an impact on one of his favorite corporate targets. he ordered a task force to review business practices at the service, claiming that the postal service loses money delivering packages for amazon. the post office says it makes money on the deal. a new book by james comey compares president trump to a and calls- mafia boss him a congenital liar. lastdent trump fired comey

may, leading to the special counsel russia investigation. there is new optimism among thatcan allies in europe president trump could be persuaded not to scrap the irani and nuclear deal. u.s. and european officials say they made progress in revising the agreement and said they are close to agreeing on how to handle the iranian ballistic program. global news, 24 hours per day, powered by journalist and analyst and 120 countries. francine: volkswagen has picked a new leader. herbert these will become the chief executive. more on this, matt miller, anchor of "the european open," is a bit of a car expert. tot they want to do is shift

have more technology. as the mean they have appointed one person to think about driverless cars? matt: they have a lot of people talking about driverless cars, but many more even are talking about electric cars. it's the push to be the electric car leader that is front and center for this company. the interesting thing coming out is thatpress conference china is becoming increasingly important in that push. one of the things they have done besides appointing a new ceo is break up the company into, internally, six different business segments. one of them will solely focus on china. why do they appoint someone new now? had: well, the previous ceo a bit of an issue with speaking english. he got himself into trouble a few times with translation

issues. he claimed, for example, that the diesel cheating in california was a technical problem. he also had trouble with some comments that he made as far as his salary, got paid more than 10 billion euros per year, angering some in the german press with some gruff comments about that salary and ceo payment issues in general. i think that the porsche family and the stakeholders here in the state of lower saxony really wanted someone who was smoother and better at dealing with investors and the press. of worse, herbert eats has a great reputation for cutting costs. didn't know this, folks, they have 642,000 employees. the history of germanic corporations. are they running this for shareholders? or just as an institution of the german government and german people? i don't see any evidence

of that. matt: on the one hand, this will please shareholders, he was able just throughat bmw purchasing. on the other hand, he has been really good at dealing with labor unions, who as you know have a massive strength in german companies, 10 of the 20 supervisory boards seen here. combine that with the seats that belong to the politicians, they basically control the company. after aalong quite well confrontation with the labor unions and an agreement that he made last year. on the one hand he's trying to run this company for the family, on the other hand he has to serve the master of the government and the labor union. tom: brilliantly said. come on, you are the car guy. this is an ford or gm -- isn't ford or gm, this is a ward of germany. if i'm an institutional

shareholder that wants to go along in london today, what's my motivation? matt: your motivation is that it looks like the labor unions and the germans have gotten on board with the idea of making money. the marches are 7.4 percentage globally and it is the biggest carmaker in the world. francine: all right, matt, thank you so much. to antonio garcia pascual. case, but it could the future of transportation. which could more dramatically change the future of european economics? antonio: it could be that the data that we see early in exports reflects the changing

market dynamics and demand. the whole scandal created a bit of a repercussion across european cities. when they were landing to taper it off. consumers have understood that. the demand of these cars is decreasing rapidly. in europe in particular, remember, europe is different from the u.s. in terms of usage of diesel cars, which had been high. that is decreasing rapidly. some of the exports in germany, a big chunk of that was diesel cars and it's dropping in changing. that's one aspect and it's here and it's a structural change that is here to stay. some of that export weakness could be related to that. there is the broader issue that they were right in raising, the transformation of transports into electric, as we were just discussing, that is happening as well.

thatmount of motorists they are coming up with is remarkable. to trade going back and looking at exports from germany, does germany have a surplus problem? will fix it? peter navarro and the trump administration going after germany? or does it have to be within the european union? think the issue is perhaps domestic demand and internal demand in germany could be higher. but i do think that more fiscal expansion is coming. look, this month we will have negotiations on private sector wages and i would not be arprised if you end up with wage negotiation of around 4%, ok? has waited demands be on the party sector. more is coming. the that fix completely balance?

probably not, but it is one ingredient. global trade will be another one . if it evidently comes down, that will be another factor, but the first issue for the car industry is something that is relevant, not just the micro but the macro that you can see in the data. coming up next, we talk all things commodities with the black rock chief investment macro commodities. this is bloomberg. ♪

this is "bloomberg surveillance." good morning, everyone. aluminum is set for its best weekly gain in more than three

decades following u.s. sanctions on russia resale. oil is writing its best rally since july on speculation that development in the middle east could lead to supply disruptions, only strengthening the goldman call on commodities. the bank said the case for open -- owning them has rarely been stronger. joining us now, the black rock chief investment officer for .atural resources, evy hambro antonio garcia pascual is still with us. when you look at the world commodities, how do they fit with trade? you have a china that is changing, shifting its economy away from infrastructure into more stableat maybe longer-term, but how long will the shift take and what does it mean? i think that some of the things that evy: i think that some of the things -- evy:

i think that some of the things going on in china over the last two years is the reform production. wetoday's environment, where have shortages of commodities because of the lack of investment over the last five years with a global economy that exceeded expectations in terms the supply demand balances have moved into deficit commodities and at the same time china is now withdrawing supplies to increase productivity efficiency and focus on the environment. fromr from the shift away the infrastructure investment, which is still happening with the one road initiative driving that, we also have this efficiency gain and this productivity environment taking supply out just when the market needs those volumes. we see it in the steel space and the massive response that we see to steel prices with reduced exports of steel out of china and the rest of the world tightening up markets in europe and the u.s.. i think the headline on china that everyone tends to jump about is the one of fear and

what will happen in the economy, but in the commodities space there is a new twist to it. we are also expecting the imf to raise it once again. but is it a recession in a few years and what does it mean? evy: i have done this job for 20 odd years and china has been really important for the last 15 or so. if i had a pound for every time someone said that there would be a recession in china next year, i would be much happier than i am right now. to thing about china is constantly monitor the data. if you always anticipate the arst, you will miss out on great opportunity and the thing that most are not focused on right now is this reform agenda, thanmuch more powerful concerns around growth in china and what's happening elsewhere in the world. it's that that's really impacting the commodity markets.

tom: good morning. i want to know, your brother said two years ago about the fte is that the time of us tear it is over. is the nightmare that the family and everyone else in mining went through, is it finally over? evy: it was a massive overinvestment during the bull market of the last decade. the oversupply led to high levels of indebtedness, misallocation of capital, and we saw the correction taking place in 2011 to the end of 2015. since then we have seen a new breed of management coming in that is much more focused on discipline. we have seen balanced sheets that work on that diamond leg with regards to commodities

demand. today we have an environment where management teams are more robust in their capital allocation process, running a much longer balance sheet and generating significantly higher levels of free cash flow. combine that together in the share prices have responded. we are very excited about where we are in the cycle right now. tom: with great respect for what the airline business did, they finally had to get their act together on cash flow management. is the mining industry doing the same thing as the airlines? all sectors go through cycles. the telecom sector that you can remember, what we saw many years ago, what we were through in the resource space was exactly that. now we have a new breed of management trying to rebuild trust with their investor base and as a result we have this discipline in place. the one thing that we know for assets is that resource

are every day and i think if the moment we are in a feeling phase. underweightnerally the space today not yet back on board, there is more time and more work to do. during that time i think that our investors will do very well. where is barclays on the beginning of a commodity super cycle? can you call a bottom in commodities? good news from brazil this morning? sure, i'm notot sure i have the kind of crystal ball to call it. if you look at it from the supply demand issue with global look, i think that global growth remains fairly robust. thisu try to remove all noise around trade wars in geopolitics, look, we're looking at growth this year of close to

4%, with growth from the main the u.s., china, japan, europe, not bad at all. i thinkt perspective that this cycle in terms of global demand and what it means for commodities is still robust. with more fuel from fiscal policies, meaning it would not be a slowdown match the next year. that would be my best guess. francine: antonio, thank you so much. bloomberg users can act through the charts, cutting out the noise. go into the charts, reformat them, dazzle at your meeting. charts are good and free. this is bloomberg. ♪

♪ good morning, everyone.

with us this morning, evy hambro , a blackrock, the chief investment officer of financial resources. i look at a chart, this is one of the most obscure charts that i have, back to the eisenhower days of the 50's, inflation-adjusted crv. your family has lived this chart. is there the technology and innovation to benefit the mining industry? or is technology going to be the enemy of price, as it has been for six decades? evy: that's a really good question. i can remember a time at the end of the 1990's where one of the former mining leaders was retiring and he thought we would see an end to the real price decline of cap -- of commodities because of the lack of investment and the changes of demand and the landscape. i think your chart shows that thatclearly, going into

demand led increase. coming back to the question specifically on technology, we have been doing quite a lot of work on this recently and one of the areas that is really exciting across the space is automation, where we are seeing significant changes in the cost profile of some companies. also, the risks the margins from labor price inflation will be lower with that automation coming through. the area for the future in technology is one that we have great hopes for. to increase the effectiveness and efficiency of exploration, we are now seeing the ability to analyze data much more powerfully and we are able to target exploration expenditure much more effectively by narrowing down the probabilities of success, or loss, i suppose. that is an area where we think technology will have a big impact on the resources by deposits that were not

economic and bringing them forward for development. video want to run this again. this is francine's a gold mine out in australia. i was playing with toys that look like that truck, but you .ere living it at 17 years old mining, what can you tell us about the real world of mining that we in our fancy suits don't see? what's the number one message that you have about the reality of digging stuff out of the ground? it's hard work, that's the first point. the second point is that these are investments that take many years to bear returns for investors. in the market today that is so driven by short-term price moves , we see investors focused on the day by day or second by second moves in some commodities and we think it will have a genetic impact on the valuation of some business is. these are companies today that are deploying capital where they

expect to get returns over many years into the future and the mismatch between the short term in the market and the investment decisions that have to be taken by executives at these companies presents opportunities to groups arbitrage exploit the in the gap and that is what i have been doing for 25 years. much lack of investment in their question mark as it hit a specific commodity or a specific part of the world? evy: that's a good question. we are seeing restraint. we have seen a huge amount of capital investment over the last decade, creating this supply that started to arrive in 2012 into a market that was seeing reduced rates of demand growth, causing prices to rich reach. what we are still in now is the hangover where investors are still cautious about giving capital to companies to allocate into investment because they don't trust the robustness of

the process delivering a return. this part of the cycle will last a decent amount of time, with two years from the low, six years from the peak of capital investment spending. we still have another couple of years ahead of us where we will see low levels of investment that will be beneficial for shareholders, because we will be able to participate in the cash flows and i'm really looking forward to getting the dividend growth, the share buybacks, and hopefully re-rating some of these equities that are just trading it crazily low multiples right now. like 10 otherve questions i want to ask you, but this is from a viewer -- your outlook for silver for 2018 and what is your preferred silver equity play? >> we always get questions from investors about specific, niche areas, and we are asked for price forecasts and sadly we can't give company names out, we

are not allowed to do that. but with regards to the outlook for sober, as a commodity it has gone through a huge change. i remember starting this job and everything around silver was photography and that was the biggest source of demand. today everyone has a camera on their phone. they don't go to a chemist to get their photographs developed. today silver is driven by a variety of industrial applications like strong global growth and shipping. , thank you soo much. greatly appreciated. kevin cirilli is with us out of washington. most importantly, your trillion dollar deficit. this is bloomberg. ♪

tom: this morning, with markets quiet, brent crude at $72 per barrel, all awaiting president

trump's call to his allies were security authorities are "absolutely livid" about the yesterday chuck -- trump tweets. buried in the news, get used to trillion dollar deficits as washington makes guns and butter great again. and james dimon -- james dimon really wrote a 26 page letter. good morning, everyone, this is "bloomberg surveillance." tom keene, with francine lacqua in london. bring me up-to-date on the support that the prime minister has of parliament or the cabinet about these affairs in syria. there's actually a faction of parliament that is against it, but the cabinet overall has agreed that there is a need for action in syria and if you dig a little deeper it's not clear if it's a military strike or some kind of more coordinated military strike, but

muchinly there has been so of this and, of course, this being the u.k., it has been turned into politics. labor party opposition are accusing theresa may of being a poodle for the u.s. because she needs to wait for instructions from donald trump. tom: i would point out that for those of you asleep in america, the real zeitgeist of this morning's general mattis at the pentagon pushing back a little bit, counseling patients. right now with your update and first word news, kailey leinz. kailey: president trump is doing a u-turn on the transpacific partnership, ordering officials look into rejoining the trade deal that he pulled out of days after joining the white house. but he said it would only be rejoined if it was better than the deal offered to president obama. china with a surprise trade deficit last month, exports and imports rose, leaving a -- leaving a trade gap.

they called it the seasonal affective the holiday. as you mentioned, it appears would join they u.s. and france if military strikes were launched against syria. president trump yesterday. the u.k. says the two of them agreed on the need to deter the further use of chemical weapons by the syrian regime. pretty soon opec will be able to say mission accomplished in its quest to dry up the global oil glut according to the international energy agency. the iea says that less than 10% of the surplus and oil inventories remain. they had a three-year high in new york this week. global news, 24 hours per day, powered by 2700 journalists and analysts in 120 countries. this is bloomberg. equities, bonds, currencies, commodities, i'm going to call it quiet. francine did a better job than i did in the last data check.

the euro, where it has been for a month. crude oil, elevated, continuing elevated. we had a 73 on brent, francine. two days ago a cup of coffee and now we are persistently at $72 per barrel. there's definitely a lot going on in oil. look out for that if there is military action in syria. we also have a little bit of news from the iea, following the positive session in asia. investors are taking heart from further signs of trade tensions easing. dipping yields are after rising 2.8% on thursday. tom: i want to get to kevin cirilli and the affairs of washington, but first to get to .ong kong the ppe, it's a done deal for x number of countries. lawrence cuddly -- lawrence

kudlow is going to fly to japan and lecture these guys on how to adjust tpp? i don't buy it. >> that's the headline and the announcement. a lot of the reaction in asia was more subdued, shall we say. japan saying stuff that they are not open to renegotiating the whole thing. australian said that they expect the deal to come into force. it was a warmer response from vietnam and singapore. they said the u.s. is welcome back at any time. it goes to show you that while mr. trump may say that the u.s. has an interest, it may not be as simple as he thinks. do those nations need the united states of america in tpp? yes. the answer is

the very beginning, the whole point of it was getting access to the u.s. markets for these smaller countries. some of the smaller countries like i mentioned stood so much to gain. the problem is the ship has sailed on. it was remodeled and reconfigured and a lot of the concessions were made to get into the u.s. market and had to be made. a lot of the political goodwill was born and it's not clear if they are saying start again and bring it back to the u.s.. but the president wants to renegotiate, right? or does he want a better deal? deal would be satisfactory for the u.s. with china? --n it comes to the u.s. enda: when i comes to the u.s. and tpp, mr. trump may realize that it was an opportunity loss. it puts the potential for these itding partners to be over

on china, so to speak. as for the chinese u.s. deal, by all accounts think seven better since the speech at the start of the week. president trump is talking about the possibility of a deal being done. but there are wider concerns over these 301 issues. with the technology and the like it's a whole different story and there's no sign of an early resolution to that i would say. francine: this china have a role in playing in this? i think they do, to some extent. they have been given this opportunity to stand up on the world stage, spreading this massive infrastructure program around the world. it is cozying up to countries like russia and sending

overtures to the eu. whether or not that extends to taking an exclusive -- exquisite with the current problem. we now go to washington to try to keep up with what's happened in the last 42 minutes of a historic week of news flow. kevin cirilli is our chief washington correspondent. general mattis seems to need a strategic plan. you've got to be kidding me. what is the dialogue between the pentagon and mr. trump right now? the message she's -- kevin: the message he is getting is to, one, have more caution with regards to a potential syrian missile strike and to develop some kind of long-term strategy for the region.

that's the pressure he's getting from republicans, which is aally -- start to formulate long-term strategy for u.s. policy in syria. tom: here is part of a blistering note from one of our great political economic observers. some law enforcement and intelligence officials are intensifying efforts to force ."e president from office he goes onto to say that "the cohen tapes are an enormous threat, general kelly likely to depart soon, fearing a constitutional crisis if trump fires any of rosen stein's appointments. i countably, they have decided the trump must go." that encapsulates the tension in your world. who are you observing within this maelstrom?

the big takeaway for me has been the senate judiciary committee deciding it would take a bipartisan legislation that would make it difficult for president trump to remove either of those folks, most notably bob mueller. that is something being taken up by the republicans, chuck grassley of iowa. the fact that this is coming before the senate judiciary committee clearly, from a guy is pretty lockstep with president trump, is important. tom: i want to interrupt because this is so important for the global audience, you need to define this. the senator from iowa is standing up and doing whatever he thinks his duty is as speaker ryan walks out the door. what is that tension in the gop? you and i saw that tweet of the gop last night going after mr. comey like i have never seen in

any of my study of american history. what is grassley's position within the republican party that's left? kevin: i think that senator grassley is in the senate has much more support. there are a lot of folks in line with him. -- we have listed four weeks senator flake, senator mccain, all the folks who typically criticize president trump but there's another contingency watching these senators, that they are not aggressively openly criticizing the president, but they are fully prepared to do what they feel is best. i cannot convey this enough, what kevin just said is so important. the remaining nuances of the republican party are what i will be watching into the weekend. francine: yeah, me too. when you look at james mattis,

there were questions about him in the past, but his he really the only person the president listens to what it comes to foreign policy in the middle east? no, francine, i think he's taking advice on the middle east from a host of different folks, but i do think that there is intense criticism and also anstration for a lack of articulated policy and a longer-term strategy. that is becoming more palpable. i'm not sure how much longer president trump can, can continue without articulating some type of strategy or making some type of longer statement. it's one thing to kind of will he or won't he with regards to a missile strike, but as we just saw from the readout with theresa may, at some point he's going to have to articulate some type of longer, longer strategy.

kevin: who is he listening to on tpp? francine: --francine: who is he listening to -- francine: who is he listening to on tpp? kevin: a lot of folks would like to know. that's anyone's guess. this is a candidate who criticized tpp for as long as i can remember and now, seemingly, providing himself some wiggle room, he tweeted a bit of a back off for it. be an openingto bid with regards to -- hey, we are here to negotiate. should he rejoined tpp, there are many folks in the trump movement that backed him because he decided to be against it. that said, the business community would applaud it. thanks for the great covers this week, kevin cirilli. it will be interesting to see the spin and the 7:00 hour.

mark short is the president's director of legislative affairs. i wonder if that also includes the senior senator from iowa state with us, from london. from new york, this is bloomberg. ♪

," let's get the thisberg business flash -- is "bloomberg surveillance," let's get the bloomberg business flash. schwimmer has some big boots to fill, the former ceo lead a sixfold rise in the stock price

and made lsp the world's largest clearinghouse. is being urged to keep his bags packed by the european parliament. he has been invited to testify on data privacy before three european parliament committees. investors will learn this morning what the federal reserve's recent interest rate hike means for first-quarter results. jpmorgan, chase, citigroup, all reporting earnings for the opening bell and the big focus will be on how it affected the bank interest margins. that is your bloomberg business flash. right now we are thrilled tobring you thomas michaud talk about american banks. it's about all those banks out there that are the backbone of our financial system.

they made lamps, that's what i remember about the company. we are thrilled to have you here. what is the state of our smaller and regional banks, given the presumption of rising interest rates? you and i have seen this before, suddenly credit quality becomes important. is that a chief worry? >> there are a lot of positives. you and i have talked in the past, the banking industry was not designed for interest rates. so that's positive. the other thing i would say is i call it the absence of redick atts, adding multi-decade -- a multi-decade low terms of credit costs. that has been the term and it

will likely go back to a typical level of credit costs. it something we are watching for, but we don't see anything like that happening soon. is the urge to merge? are people so comfortable that they love to manage the local bank? is everybody so comfortable that you have no fees coming in? last year there was a lot of m&a. we did 10 of the top 12 bank mergers in america last year. the thing about the consolidation last year was that i was really below the radar. tom: i'll say. thomas: the big banks have been out of the game, there's been something called regional we calls, bracket, g, it, the evolution of these regional champions at the smaller banks. bill passes, tom, it will change. you will see bigger bank m&a.

the reason he got up bracketology is he had middle barry and his basketball bracket -- middlebury in his basketball bracket. thomas: they didn't win again this year. [laughter] talk aboutet's european banks. are we going to see cross-border, cross atlantic consolidation, or would that be far-fetched? i don't think so. european banks are behind the american banks in terms of the recovery from the global financial crisis and are still focused right now on their own profitability and really what it is they want to have for a proper business line. i think you will see more restructuring in the european banks before you see them really pick up in terms of cross-border consolidation. you mean byat do restructuring? is it the investment banker will

be significantly down question mark european banks simply cannot compete with the jpmorgan's of this world? look, the story of the last five years is that investment bank market is growing and they have been the first to recapitalize and a significant way, i think that's causing a lot of the european banks to rethink where they want to be. we saw it in the news recently, lots of conversation about what's happening at deutsche bank. there's been a bit of shareholder activism of our clays, talking about the proper mix. what is key is when the history books are written, they will go back and look at the legislative and rule changes that required the european banks to be regulated by the federal reserve at that level in the u.s. sametand up and have the capital liquidity metrics as the american banks, which wasn't the case before the crisis. that has required the european

banks to put more capital and liquidity into the united states and it changed the profitability matrix. that is the redesign that we are seeing, the follow-on effects of. is that investor angst there? i just looked at a regional bank, the name of it doesn't matter, but it has gone nowhere .or 10 years where is the investor outrage at lazy total return in smaller banks in america? thomas: u.s. smaller banks? tom: yes. thomas: we are seeing a real stratification by size and performance. so, if you tend to be a bank that is below a billion dollars in assets, which by the way is most of the banks the country, they have been a bit more challenged from the profitability perspective. tom: when are we going to merge?

this is an andrew jackson in the world for kbw. thomas: today's consolidation is different than it was in the 80's and 90's. at the time this was one of the most prolific banks. today the most inquisitive banks banks, maybe three banks per year. it's happening, but maybe at a more steady and slow pace than if it had a burst of activity. since i last saw you, we lost a giant in banking. i saw him weeks before he died. what did you learn from mr. willens? that is the long term that matters. even jamie dimon wrote about a recently. don't run your company for the current quarter. think about getting it right over the long-term. i remember some of the early deals that he did. i think first it was empire,

then it was a couple of savings tanks during the crisis in new york city. he was willing to take simple steps to build value for the long-term for shareholders and he always thought in the long-term and it rewarded shareholders greatly. i have followed his career for several decades. at the same time, you don't know what kind of environment the fed will create. and then there are so many questions about trade and geopolitics shifting. how can you run a company for the future if you don't really know what the future looks like? the landscape is changing. and that's was interesting. the story of the banking industry in the u.s. is that it's got the highest degree of capital that it has had in 70 years. that really is a game changer. going into the global financial crisis, banks were allowed to be much more levered.

when confidence got a bit shaken, there wasn't enough of a foundation there. i would applaud regulators for having heightened liquidity and capital standards. i think that the pendulum in too far, but gone in the long-term, having a well-capitalized industry like we have today will allow us to get through the future shocks. do you worry, or do you think that facebook thomas: or google becomes the bank of tomorrow? happen think is going to is that google or facebook will probably want to interface with customers and clients through banking services but they will probably do it through a jv with a bank. i don't know if they wish to become a bank. if you become a bank, the regulators have done a good job of keeping the whole system buttoned up. they would have to agree by abiding by all the banking rules and my instinct are that they

wouldn't want to do that and they would rather partner. what has happened with this collision is that the banks have an important seat at the table and they are not being disrupted , but they do need to involved with syntax. tom: a brief correction, i meant robert wilmer's, when i spoke of m&t bank earlier. i want you to give some advice to mr. zuckerberg right now. you faced immense adversity after september 11. all of this whining about facebook, i'm sorry, i'm sorry baloney. what's your advice to get the leader strip stream quarter to quarter correct? to have simple, core principles and a culture around the organization that allows you to rally around that, to get your company where you wanted to go. i would just recommend -- and i haven't studied every word he gave in his testimony.

i have seen the highlights. but i think that at times of crisis you need to know what your principles are and you need to be a wee organization, not .nd i organization you need to rally the whole company around it. francine: thank you so much, thomas michaud. speaking next, we talk budget with stanley collender. this is bloomberg. ♪

tom: "bloomberg surveillance." from london and new york, right to first word news, here's kailey leinz. kailey: president trump is shifting his town on trade. the president has told his staff

and to looking to rejoining the asian trade agreement he withdrew from after taking office. he wants a better deal than the one president obama got. expressedtrump optimism about reaching an agreement with china. he says the two countries may ultimately not impose tariffs on each other. present trump is also making a move that could have an impact on one of his favorite targets, amazon. the president has ordered a task force to review business practices at the postal service. he claims the business is losing money delivering packages for amazon, but the post office says it makes money on amazon deal. comeybook by james compares trump to a mafia boss and calls him a congenital liar. jamesent trump fired comey last may and that led to the special counsel investigation.

new optimism among a american allies in europe that president trump can be persuaded not to scrap the iranian nuclear deal. u.s. and european officials say they see progress in revising the agreement. they said they are close to iran'snt on handling ballistic missile program. global news 20 for hours a day powered by 2700 journalists and analysts in 120 countries, i'm kailey leinz. this is bloomberg. tom: this is the interview of the day. us and colander is with gives us his wisdom on guns, butter, debt. i want to link them together. the general is worried about using patience and caution. is our military properly funded and are the people at risk in the united states and the mediterranean and the levant have the right resources? stan: the answer is yes because

we came up with a $1.2 trillion funding bill that dramatically increases the alipay by $700 billion or so a year. we are talking about decent dollars. most of this will go to new weapon systems and not troops. there will be high-tech updates for the military that will be useful for years. tom: paul ryan is retiring and there's all sorts of comments. don't bring it up now, but paul krugman really censoring out a conservative the algae on the debt and the deficit. with mr. ryan's exit, who becomes the traditional conservative debt and deficit guy for the republican party? stan: it's a really good question. i'm not sure paul ryan was as much of a traditional debt and deficit guy as you are making. of paul ryan is that he will have presided as speaker over the biggest

permanent increase in the deficit and debt of any previous speaker in almost any other time in american history. hes is the person who said was adamantly against the deficit and debt and one to eliminate both of them. i not sure that the reputation is earned. are asking the right question. it is not seem to be anyone inhin the republican party the house that seems to take up the mantle of the moment. we are talking about permanent trillion dollar deficits as least -- at least as long as the trump administration. tom: i will see you in washington next week when we attend the imf meetings. banker and he shows up at 10:00 a.m. and wanders out for a long lunch and comes back at 4:00 p.m. advised him on what your world is going to do to his world. what does our fiscal affairs due to banking 36 months from now? for: i hope you prepared

higher interest rates because we're talking about a fiscal policy dramatically out of step with monetary policy. we are talking about a monetary policy dramatically out of step with where the economy is going. these trillion dollar plus on good are all based economic growth at 3%. if the economy goes down, we are talking about deficit even higher. there's going to be a great deal of washington economic policy. thomas: what does it trigger? do you think it will ever get us to entitlement reform? what do you think it will lead to a 30 to be a response to it? stan: it's an interesting question. i use the word permanent couple times here. it is unlikely in the current political situation that even chilean dollar plus deficits are going to force people to look seriously as social security and medicare. the politics just isn't there yet. i'm not sure there's much that

can be done. if interest on the debt is going to be rising and defense is going to be rising in social security and medicare and medicaid are going to be rising, there's not enough left to have much of an impact even if it was a serious look at domestic spending. these deficits are here to stay. the new normal is not going to be just $1 trillion but getting it down to $1 trillion. that will be the new goal in washington. francine: i want to come back to foreign policy in the middle east. what does an escalation of u.s. military action -- doesn't risk extra treasury issuance? stan: almost certainly. this dollar number that are mentioned to you doesn't assume any military contingencies. if there was some need to be firing missiles at a repeated rate, there would have to be an additional defense appropriation

and therefore an additional treasury borrowing. we are talking about a couple hundred billion dollars and maybe more than what we are already assuming. francine: this depends on what kind of scale? how difficult is it to predict in advance because we don't know how many troops could be deployed if it's not only limited to military strike? stan: we're talking about couple different things. you're exactly right. are we talking about putting troops on the ground? or are we firing cruise missiles once? are we talking about a effort overted time or a shot across the bow to change assad look? there's a concerted effort somewhere between $200 billion and $500 billion additional per year in military spending if we get troops on the ground and it's a concerted effort. tom: do you believe that thomas you intion to

the honor of entitlement reform? can we do anything about social security with the timeline of 13 years? we have a dropdead date on social security. is that not a great catalyst to do something? stan: i've been asked this question for 20 years and i will tell you the same thing i've always said. what is the last time you saw congress and the president do something before they had to do it? it would make more sense if they could deal with it now. it would be a less harmful and more politically acceptable effort than waiting 13 years. waiting 13 years means the crisis is there and members of congress's hands would be forced. tom: the fact is these fiscal stimulus boost gdp. mr. colander mentioned, it helpful the higher rate regime. helps with the day-to-day for a banker. thomas: at least not zero rates is better.

you do not want rates too high and you do not want them to go up too fast to her clients. the other is the shape of the yield curve. we are seeing a flatter curve as of late and that tends to be a negative for the banking industry as well as a singling moment. what stand was just talking about is really what corporate america is calling for. you were talking about jamie's letter. some of the things he said is america's debt problems are not going to age well. i think that is true. the other thing he says is we need to do with issues that are predictable and problems that are predictable, which is what stan was talking about. tom: we will see you next week. what i want to know simply is your headline item. the new normal is now to get down to $1 trillion. how many years can we sustain that? stan: we don't know. we have never been here before.

my guess is we are looking at least a decade and probably longer. keep in mind that $1 trillion is the optimistic outlook. $2 trillion is more likely. tom: thank you so much. , briefingpreciate it on something in the news this week just buried by all the other headlines as well. for your morning news briefing, robert coast-to-coast. your best summary with "bloomberg daybreak." colander in washington, d c and in london. this is bloomberg. ♪

kailey: this is "bloomberg surveillance." i'm kailey leinz. let's give the bloomberg business flash. shares of tesla are rising in

premarket trading. ceo elon musk says the electric carmaker will be profitable in the second half of the year. he made his remark on twitter earlier. teslaonomist tweeted that would need to raise up to $3 billion this year. the chairman of qualcomm is making progress and lining up enough funding to take the company private according to a person familiar with the plan. paul jacobs could make a bid within a few months. qualcomm after a failed hostile takeover meant by soft come. sage group plummeted after a surprise warning that they fail to meet expect patience. the company said growth will be hit and poor performance and enterprise software business. that is the bloomberg business flash. tom, francine? tom: thomas is with us and we are thrilled to bring you gerard

cassidy, the legendary analyst. he has seen up-and-down. i want you to explain the size of jpmorgan. they are going to bring in $1.1 trillion of revenue. they bring some $40 billion to the operating income line. i would say day after day people don't understand how big this dimon is. gerard: you are absolutely right. this is by far one of the largest banks in the world and not just here in the united states. nder chairman and ceo jamie dimon, this has been one of the best performing banks in the world and not just in the united states. hats off to him. he has pu done a very good job and we are expecting to see good numbers today. tom: what strategies can he and his team due to move the needle if you are that they? did?

big? question.at's a good it's multiple strategies and their strategies are they want to focus on being number one in every business that they are in. as you know, from the capital markets perspective, they are one of the largest capital market players in the united states. they are one of the largest consumer banks and commercial banks. it's a revenue growth focus to grow all their businesses. , focusing onime managing expenses and they are doing that with increased use of technology. the chief executive said in his annual letter released last week that the bank can grow almost everywhere, even in fixed-income. do they get too big at some point? gerard: i don't think so yet because when you take a look at our banking system, as you know, we still have 5700 banks in the united states. though they are one of the top banks in the u.s., their market

deposits issured by still just over 11%. in our view, they are not out of size where they will overwhelm the size of the u.s. economy . francine: where should they grow? when you look at what management and asset management and investment banking, where do you think there is opportunity? gerard: one of the opportunities they have and they announced the strategy to grow organically because of their size and they are not permitted to buy a depository is that they are growing organically in markets in the united states where they do not have a real presence. one of those markets for example is boston. another is washington, d.c. the consumer commercial bank growth is going to be focused on u.s. markets where they don't have any presence. globally in terms of capital markets, we see them growing bigger in asia where their presence is not as strong as the other banks. tom: gerard cassidy brings up

something near and dear to thomas. geography is an interesting thing for banking. an mr. dimon use geography as weapon to build size even though the government says you can't get bigger? thomas: i think it is starting to shift in the digital revolution changing that. jpmorgan is making her the biggest investments in the world and to technology. they are changing that dynamic able to bit. there opening some satellite offices in cities that they are not in and really using technology to build around it. we have been seeing a number of branches in the united states start to decline. tom: gerard cassidy, this is really important. we saw hutton go down in flames because they did not ill technology and their other names i won't mention. how do you parse jpmorgan as a technology elite versus other banks you look at? gerard: what we look at is the

amount of money that these larger financial institutions are spending. as we know, jpmorgan has come out and said they want to spend around 10.5-$11 billion on technology. bank of america is spending about $10 billion. they realize and recognize that the future is the digitalization of banking. it is going to be very important and i think you are going to see them be the leader along with the other big banks like bank of america and citi. to be leaders in this area. francine: talk to us about how you think the fed rate hike impact of jpmorgan. i imagine investors want to know the idea of what future rate hikes can deliver in terms of revenue. gerard: the rate hike that we saw in december is going to favorably impact their net interest margin. one of the big regional banks reported a moment ago and their

2.91%.erest margin was that's up from 2.77% a year ago. that is the real impact we are going to be seeing in my opinion from these rate and netreases is the interest margin should rise in this quarter. francine: what are you expecting the share price to do? i'm looking at jpmorgan shares and they have definitely outperformed their peers this year. gerard: i would expect because of the recent volatility in the bank stocks trading off a bit the last couple weeks -- we anticipate that bank stocks should react favorably if we have numbers that come in better than expected for these banks. francine: they're just coming in. we're just seeing finally the jpmorgan numbers out. first quarter earnings-per-share

$2.37. these take time as we try to figure out what it means and whether they are comparable to last year. that for the moment is the only kind of headline i am seeing. i don't know if you are seeing anything else or if you have the numbers out separately. if you look at the adjusted revenue, it seems to be beating the highest estimates. the first quarter adjusted revenue this 28.5. you can see it is up. 28.5 instead of the 28.2 we were expecting. tom: looking for the complete powerpoint from mr. dimon. provision for credit losses goes to thomas of kbw. withower-than-expected $1.5 billion. it comes in lower at $1.2 billion. machine andll-run

the scope and scale of jpmorgan is so big, what do you look for when you see the 25 page earnings statement come out? thomas: i look for trends that are going to drive that return on equity. jamie said in his letter that return onill earn 17% tangible common equity again. earned that before the crisis, but it has a lot more capital and equity. there's a storybook being told in these banks, which is they put the global financial crisis behind them. they are jumping to the new environment and frankly just getting better. i think that these quarterly reports are just part of the story that is unfolding. tom: how would you respond to politicians -- and mr. dimon touched on this and his letter and i recommend you read that letter and its footnotes. how would you say that jpmorgan is to the? o big?

thomas: the top for banks have 40% of the deposits in america. that conversation should happen and the way to change it is to not dramatically change with tapping at the big banks but actually to release regulation on the mid and smaller banks. that is what the current senate does and that's to remove that $50 billion barrier. was happening is that there are regulatory impediments to creating competitors to the nations for biggest banks. that's the biggest issue. let some of these regional banks continue to evolve with a little less regulation. they were not the ones that turned out to be systemically important. tom: we are just getting up here now. i want to come over to the screen and show you this is the new distribution. instead of getting a stream of headlines when earnings come out as francine mentioned, we wait for a powerpoint, which is moments ago. it came up. here. we are not even getting all the

information we need, but the answers is that core loans are up 6% on a nominal gdp basis. look at his eyes. his eyes are sparkling right now as a dealmaker in banking. that the organic revenue growth. thomas: that is very big. to think the bank of jpmorgan sizes growing that quickly. 6% of jpmorgan's loan portfolio, i don't know off the top of my head, but that growth may be a top 100 bank in the country. tom: can you extrapolate that to the rest of banking when you look at a good 6% loan growth number? can you bring that over to all the other banks to follow? gerard: i think what you are hisg to see his jpmorgan -- jpmorgan's loan growth is very diversified. it's not just in consumer real estate. into the numbers, it will be interesting to see -- fromit's one from

one particular area or the other. it's a good righead. thomas: you will see a difference. i do not think all the big banks will have the same growth and that will be part of the storyline here. i think jpmorgan's growth will probably be the best of the biggest banks. francine: i'm just trying to go through some of the other headlines we are getting. the chief executive putting out the release that we have been outpacing the industry on consumer deposit growth. a strong market performance was driven by record equity revenue. he posted a return on tengion equity of 19% in the quarter, topping the 18% medium-term target. are we going to see a bank that will have to put more ambitious targets out? gerard: i would say that for j.p. morgan chase that they are going to continue to focus on the targets they have already put out. not all banks disclose these

targets as jpmorgan has done, but they have certainly put out targets that they have now exceeded already here in the first quarter. tom: i want to bring this up right now. this is the actual first quarter number. the distribution is from all the banks is a struggle. average car loans up 6%. gerard cassidy, the number now for first percent -- first quarter is 8%. i would see just an extraordinarily positive number. gerard: i would agree with you that it is a positive number and jpmorgan sets the tone for the banks when they come out with their numbers. the tongue this morning is positive. -- the tone this morning is positive. francine: a comment on the back of it? thomas: my senses that i would agree. granted i have not had a chance to dig into the results, but just from the headlines i see, it looks like we were expecting

good results and they were as good or maybe a little bit better off the initial headlines. tom: let's go down lower from this presentation out of .pmorgan could thi this is the new distribution of banking and i've tangible book value up 4%. it's a great number, but i want to know from a banking guy like you. was tangible book value? tell our audience worldwide why that is so important to jamie dimon. thomas: what it really is is you take the assets and minus the liabilities and what is left is the shareholders investment in the company. was the consistency of its growth? if it's a consistent grower, investors will pay a premium for it. that's really the idea. different management teams to different degrees focus on it. i know jpmorgan often sites that they think it's the anchor for their share price. tom: thank you so much for the perspective on american banking.

gerard cassidy, thank you so much. we are going to drive forward the banking discussion with all the other news flows through the morning. jpmorgan beginning our earnings quarter here at bloomberg. how about a foreign exchange report? maybe jamie dimon cares about foreign-exchange. the yen weaker for the week. also come bitcoin with a big today pop. francine lacqua in london and i'm tom keene in new york. stay with us through the day. this is bloomberg. ♪ this wi-fi is fast.

i know! i know! i know! i know! when did brian move back in? brian's back? he doesn't get my room. he's only going to be here for like a week. like a month, tops. oh boy. wi-fi fast enough for the whole family is

simple, easy, awesome. in many cultures, young men would stay with their families until their 40's. ♪ alix: bank bonanza. jpmorgan out with earnings and

crushing estimates. city and wells fargo on that. trade whiplash. hesepresident trump says would consider rejoining tpp while asian members opposed renegotiation. sweeping corporate changes as it tries to transition to electric vehicles. david: coming to a beautiful shot and it will bit hazy of the new york city skyline. welcome to this friday the 13th of april. i'm david westin with alix steel. alix: you will be playing tennis in the sun. interesting session that will be evolving as we get bank earnings that the morning. equity futures are up by 3/10 of 1%. the euro-dollar pretty much flat, resilient but also constrained. those are two words many analysts are describing. yields are starting to unchanged.