anna: good morning from london. i'm anna edwards. manus: i'm manus cranny in dubai. these are your headlines. china holds off the second largest economy continues to grow among strong consumer spending. we are live in beijing. manus: the fed's new faces, president trump intends to we are live in beijing. manus:nominate the vice-chairma. anna: netflix's blockbuster earnings. despite hiking prices, the streaming giant posted it strongest subscriber growth since going public 16 years ago. ♪

manus: good morning everybody. anna: it is just past 6:00 in london. a little later in the morning in dubai. let's talk about what has been going on in the asia session. a little bit lackluster in the asia session, the strength of the data we saw come out of china. perhaps online sales. a little lackluster on the old economy, industrial production. we will talk about that through the progress. the dollar index is pretty flat, but a little bit of ground. we have seen the dollar near its lowest in two months. president trump, of course, has been active on twitter in the past 24 hours. one of those has been none of the f -- has been on the fx subject.

the affected that had been dollar weakness. the focus this week is going to be around the fed. nomination of the vice chair printing u.s. century bank. the aussie-dollar, and little bit weakness. shrugging off bullish assessment from the rba. bank. the aussiearound the strength oe australian economy. shrugging that often currency markets because of the benign look for inflation and what that does for interest rate expectations. that is a look at where we are on the overnight trade. the growth story out of china. manus: all of that, you have been away for just a short period of time. if you think the two months there has been in europe, i think they waited until you went somewhere warmer. the bottom line is we have had strikes, tariffs, rhetoric, more tweets than you can throw at the s&p 500 on an average day.

the bank of america merrill lynch index -- back below zero. this tracks global equities, commodities, currencies, a basket of risk elements. we are subzero. 55% below the five-year average. that is critically important because negative readings mean less stress in the market. yes, the u.s. equity markets have sighed relief. the s&p 500 has its highest level in months. it is back to black for the year. we have wiped out the loss for the year. the question is for markets whether this is a precursor perhaps a little bit more continuity in the market. everything is thrown at this market and we are getting into earnings season which we will talk more about the the next hour. losses in thehe last week. one thing that is interesting

this morning is u.s. futures pointing higher. the decent session we had in the united states yesterday despite the latest violence in syria and the attack in syria by the u.s. and u.k. and others. this is a picture u.s. futures are looking at right now. brother upside to come in the early stage of the trading day. we will have a good conversation about oil. international agency agency's executive director will be joining us for an exclusive interview at 10 a.m. u.k. time. what he has to say about the latest comments from saudi and the rest of opec of where they want oil prices to head. let's get the first word news update. ed: u.s. president donald trump suffered a setback as a federal judge rejected his initial request to peep prosecutors from immediately reviewing evidence seized from the fbi last week from michael cohen. the district judge ordered

prosecutors to make available to cohen's attorneys seize they must put itd. into digital form and not review it yet. cohen also representative fox news anchor and vocal trump supporter sean hannity. donald trump has reportedly put the brakes on a preliminary plan to impose additional economic sanctions on russia, according to the washington post. preparations for measures against moscow caused consternation at the white house. the move will roll back the announcement from ambassador nikki haley on sunday that the kremlin and swiftly denounced as international economic raiding. the white house has announced donald trump's intention to nominate richard clarida as vice-chairman of the federal reserve. the global strategic advisor at pimco would replace stanley fischer. this nomination fills up the leadership team of jerome powell

following his election earlier this month as the next head of the banks new york branch. china's holdings of treasuries months, most in six underscoring the attractiveness of american asset even between tensions.es -- china's ownership of u.s. bonds, bills and notes increased by $8.5 billion to $1.18 trillion. china remains the tensions. china's ownership of u.s. bonds, largest foreign creditor. theresa may is to face a second debate in many days on britain's role in bombing syria. that comes after she stayed late at the house of commons listening to lawmakers views. may was present for six and a half hours of precedin -- proceedings, including three and a half hours of answering questions as she wants to face a commitment. global news 24 hours a day on air and on twitter powered by

more than 2700 journalists and analysts in more than 120 countries. let's check on the markets in asia. in asia as is mixed investors check the chinese data. the hang seng is trading flat. japan stocks are fluctuating. the nikkei 225 up 1/10 of 1%, but higher by discretionary stocks. the yen holds gain. in sydni, shares arising for a third day. reports from the rba. equities are higher for a ninth straight session, the best run of gain since september 2014 is the earningsin sydni, shares ara third season is underway in india. stocks on the radar in the region. jumping hong kong after three months sales growth picked up, thinking of stocks. gaining over 6%. macau casino operators rising after offering the profit

which is finding support after j.p. morgan upgraded its stock to overweight. hyundai voter group companies are gaining ground amid reports that management is seeking higher dividend payouts. manus: thank you very much. china's gdpchina's gdp group 6.e headline number. robust consumer spending, economic expansion. retail sales up more than 10% in march. industrial production which is g support after j.p. morgan group 6%.ts stock to tom mackenzie is on the ground for us in beijing. those are the headline numbers. what the world wants to know is 6.8% sustainable? that is the question. analysts seem to think that in fact we will get a softening of the growth picture going forward for china because you have had this domestic demand being the force of the picture. that are number of factors

including the property sector which could weigh on the growth outlook for china going forward and some of priorities laid out by the government in terms of tackling debt and poverty and pollution. a strong number for the first quarter but potentially moderating as we go ahead for the end of the year. target is group tensions around 26.5%. anna: how our trade between chie united states set to play out here? to what extent can china keep things in the status quo is the question? well, they obviously did not have much of an impact on the first quarter numbers but we may get to see that feeding into the future gdp that we are getting out. china imposed those $3 billion worth of countermeasure tariffs. they are not likely to have a significant impact. we are looking for the $150

billion worth of tariffs from washington. this is a key concern for china watchers, these trade tensions. manus: one of the most read stories is moving up as the morning goes on, the u.s. action against zed. who are they, why do we care? what is the providence of this? tom: they are a major smartphone maker, telecoms equipment maker. this action from washington goes at the heart of the concerns here in china about increased restrictin the u.s. to chinese companies access to technology. may have been -- they have been barred from buying the chips and modems they have been getting for seven years. this is a serious setback for the company. these measures put in place over some trading they did with iran an north korea. the broader picturethis is a ser the is a focus on the security concerns of the u.s. ,hat this means for companies

the number one economic telecoms maker. anna: thank you very much. we appreciate your time. , cancer joining us from beijing -- tom mackenzie joining us from beijing. joining us now on set in london is julian, the european economic strategist at jpmorgan. good to have you with us. what are your thoughts on china? when you look at the asian market, reaction pretty flat across asia equities. u.s. futures point a little higher. to what extent is this mixed bag of data slightly positive, or reaffirm your global thought. julian: if you think about retail sales, pretty good. if you think about private investment, the number is good.

gdp numbers are very solid as well. i think we interpret data is let's not be concerned about a global recession. china is still doing very well. all in all, it is good for the global economy, the chinese economy and we are pretty satisfied with those set of numbers,china is still doing ve. all definitely. manus: very good morning to you. one of the things that happen in the past 24 hours was tweets on russia and china, a gain. a big week for the market. the yuan against the the dollar. trump is calling russia and china have. this is a big week possibly for the remission of fx wars, is it? julien: this has been a topic that has been with us for some time and will stay with us for some time now. you have to see the big picture. the global economy is doing fine, although you could use those terms to described china

or russia. it does not meet necessarily it will follow through with any whatof measure to prevent some people call a currency war. i think the bottom line is this is a topic that will stay with us for some time. we have to be model of that -- mindful of that, but there is no reason to be really worried about those headlines. anna: you say global growth was robust. i have this chart, the forecast for global growth. they do predict it will be a bumpy year, but 2019, some moderation. are you expecting to see some moderation? some people are concerned about moderation in manufacturing data, growth data already in developed parts of the world. what is your concern for global growth? julien: i think it is normal after such a strong 2017. at some point, we are going

to see moderation. moderation does not mean recession, but we stay at a level because of global growth. 2017 was a great year, 2018 could be a better year. the first quarter was a bit soft, especially in europe. 2019, that is where we could see maybe a slight deceleration that this is not a recession. global growth will be really strong and supportive. manus: we are starting to earnings season with jpmorgan, bank of america, netflix. more on that later. there is a proposition that we are not fully paid up. s&p is back in the black for the year and we have this lovely story this morning that equity markets basically, there is an impression that earnings is what us to returnave mojo.

would you agree with that as an equity strategist? the performance over one year. year to date, back in the black. julien: i would agree that earnings are key. if you look over the mojo. would you agree with that as an equity strategist? long-term, earnings are the main driver of equity performance. therefore, it is very important that companies deliver in the first quarter. the numbers we had so far are supportive. the u.s. is expected close to 17% which seems like a big number. yuan equities are not necessarily responding well. that is the short-term impact in the sense that people acknowledge the fact that earnings are strong. at the same time, that all those issues, trade wars. the geopolitical issues in syria, etc. at think for the investor, most important, earnings are coming through. when people are talking about the fact the market maybe overvalued or expensive, it is not as long as we get these earnings deliveries and so far, so good, i would say.

manus: we have the re-rating on the s&p forward earnings, we have come up from those highs down to 16 so that may be something to consider. that is julien, european equity strategist at jpmorgan private bank. if you are on your way to work, where with you all the way. bloomberg radio is light on your mobile device or digital radio. anna? anna: you can find us occasionally on radio. manus usually from 8:00 u.k. time. coming up, fed's number two. trump picks richard clarida as his pick for the vice-chairman. next week, the strongest subscriber growth in 16 years for netfli. this is bloomberg. ♪ ♪

anna: this is bloomberg daybreak.

it is 6:19 a.m. in london. gloom skies over singapore. asia-pacific down by 2/10 of 1%. lackluster response perhaps way mixed positive set of data from the chinese economy. here is ed ludlow. ed: the u.s. government has said zte violated the terms of the sanction settlement and has imposed a seven-year ban on purchases of crucial american ztecompetitive. the national security center warned the country's companies that national securitytechnologt risk by using equipment and services cannot be mitigated. the stock is suspended in hong kong. netflix has posted strongest subscriber growth since going public 16 years ago. the company added 7.1 million users and that first quarter of the year. that is despite raising prices for most of its customers over the last few months. netflix shares rose in

after-hours trade. barclay has been gauging interest in cryptocurrency trading. it is so far only done a preliminary assessment of demand and feasibility. it could potentially see the u.k. lender joining goldman sachs and pioneering a new business, but it currently has new concrete plans to such an operation. that is your bloomberg business flash. thank you very much. trump has named his pick for vice-chairman of the fed. announced hisdent nominate richard clarida. a global strategic advisor at pimco and columbia university prof. nominate richardlls the fed' clarida. a team following the selection of john williams as the next head of the central s new leadershipbank's powerful n. trump announced the state bank commissioner michele bowman as

the governor representing banks. julien, equity strategist at jpmorgan private banks. we are beginning to understand more. i think this is quite a significant proposition. this is a man who advised pimco, a phd. he was a full rate hike and bid man. himself and williams together, is that a dovish cocktail? how dovish is the fed becoming? julien: i think the introduction of those two individuals does not necessarily change the entire narrative from the fed. it has been on the steady path towards hiking. our view is we still have more rate hikes this year. four for 2018. the recent market volatility has not really changed the rhetoric from the fed, so i would not

expect him to see a lot of rhetoric coming out of this panel based on the nomination of those two individuals. it is basically steady as she goes. anna: what would it take in markets to change that or an inflation? i have this chart, 528 on the bloomberg. quite stunning we have seen the move higher in two-year rates, market rates. factoring in quite rightly where we are on interest rates from the federal reserve and where markets expect those rates to go. how long do we keep hearing words such as gradual from the fed? if we see this happening, inflation a little higher. julien: i think the fed really has to balance the market expectation as well as the economy. -- there, it should be is not much that could, in our opinion, derail the story. weaker or more volatile equity market has not dovetailed.

we have to focus on the underlying economy and, therefore, it becomes a story around employment and inflation. anna: it has not really changed yet. julien: i think the inflation is rising gradually. we will get to the 2% really soon. and probably, they will run a little bit hot. i don't think there is anything that in the very short term change this rationale from the fed. manus: the other big event, it is not about golf, but it is about a meeting between abe and trump. putting together the u.s. trade with japan. this coagulates around part of what he is saying around affects manipulation. russia and china are playing the currency devaluation game. this is his tweet. dollar suits the overall relationship.

it would improve the situation. do you think trump is heck-bent on debasing the dollar? i will not go with the other phrase so i will go with heck. julien: i think he made it clear that a weaker dollar is beneficial for the economy, and we have seen that actually. if you look at the performance of the u.s. equity markets specific sectors, the main beneficiaries, i think there is intention to avoid the strong appreciation from the dollar. you cannot level someone -- i think the story is that we need the market to play out and we need the market to decide which currency should go up or go down. our forecast is really the dollar should remain on the weaker path and that is because of the deficit, because of

things not necessarily linked to politics. anna: to avoid the strong appreciation from the dollar. the u.s. administration, the treasury department did not label these countries has currency manipulators and that is the conservation in trump tweeting about this. what about the earnings story out of the u.s. high expectations, can they be met? 37ien: high expectations -- -- 27% for the first quarter. 5% solly, you see 4% to that could give us 20% growth which is quite a high bar. half of that is coming from the tax cut. i think expectations are relatively high when it comes to the numbers but as we discussed earlier, the point for us is to see that growth coming through. that meets equity markets look cheaper than they appear and that should be supported. the u.s. administration,

the treasury department did we s high we will see if it reaches high expectations and the dollar weakness at the end of the earnings season. julien, thank you, he will stay with us. manus, we are going to talk next about what is happening in the u.k. theresa may challenges her vision of brexit. the pound highest against the dollar since the 2016 referendum. this is bloomberg. ♪ 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.

>> there is a shot for you and sufficiently? this is the choreography there on the nose and what are we watching today? it is 12:30, u.k. time and

the radio. >> jamie dimon smacked the delivered and we also have the imf check on the what is going to come up? will it be trump coming out and talking about the ruble as we go into these meetings? we heard from christine and that is the extent

to which they see the dangers the nikkei newspaper suggests that the japanese prime minister will have a new trade and -- we are delighted that you might be thinking about this. let's get into the market. >> let's starts with asia this morning and you can see china is down and there are the mixed we saw thembers and

retail sales with the industrial production and that is the picture in asia. oh auto look at the commodity front and the kuwait oil minister signaling that this deal could extend to 2019 and we have opec and non-opec members. they may want to have a bit of a and the question now bewhat the new target will and how this becomes into next year. been andama it has they called china and russia current simulators.

this is adding fire and the this yearbeen down and the bloomberg dollar index fell in the news. implicitust another desire for the u.s. dollar. we have the highest against the dollar with the referendum says that they expect to defeat the government, including telling the government

. about the u.k.. this takes us back to those heady days with the brexit vote steady pound has made gains. be under look to threat? eventare facing a binary and they have had good this and we are seeingy going to be there'sogress made and

the u.k. market and the ftse 100 with the stronger pound in that the u.k. equity market focuses on stock opportunities. we have the market that is so and they are absolutely convinced they will get this they have seennd more action this year.

you think they can rolled the .ice and go twice this year this has not been off any it will be tricky to and it isthe economy a surprise to us in the market. around and we talk a little bit about the upside of the channel and they will be addressing this and we will learn more about what they think about banking unions and policies and you are quite atlish on the french stocks

this time. does that have to do with something else? us is the driver for we havequity market and germany when it comes to the there isector and stress around the trade war. at the european level, this could help support the sentiment and this has been trailing when it comes to reform with a look

to change things for sentiment and flow at this point and we will remain constructive on that market. we are at the start of the earnings season. this may even be fully paid for u.s. growth. timehas come back just in and you look at the earnings season and the dollar debasement. this could be the headwind and and los angeles to nasty? there may be slightly more

with the basket of currency and we are looking at that for the end of the year. the headwind will become less we progress and supportive ande line and thisop is relative to what we are weecting in the u.s. and expect this surprised. >> i cannot believe they would

have all these earnings. of course, kicking off in the days and the weeks ahead. there is a great story on the bloomberg terminal today and it talks about the problem as the year progresses and that is the data from some analysts and they talk about the eurozone approaching and the possibility of running the economy hot. already a diverting opinion on the press report and you hear the conflicting message. it is stronger than expected and

the recovery is strong and we toroach that with the ecb the first rate hike and it depends on how the data shapes up and it looks like it might be and towards the end of this they are gradually moving back and we think that they should. >> a problem to have. a reminder for the bloomberg users that you can interact with me and the whole team on your bloomberg. there are the charts and used to make the adjustments. there is bloomberg radio for

manis and i often appear on bloomberg. of asset management will sit down with the team to talk about ecb money policy. program, we this will look at this next. this will be the focus and the rest.

>> mixed in the chinese economy the weekend activity in syria by the u.s. and the u.k.. a seven-year ban on crucial national security with cannot be mitigated stocks suspended in hong kong. starting a crypto currency

and this is done so far with a preliminary assessment and demand in feasibility. the people with knowledge of the matter top with investment firms andt teaming up with france they were not immediately available for comment. bank america and merrill lynch could raise his much is a

million dollars in this will likely have in the second half of the year. a representative for morgan stanley had no immediate comment. that is your bloomberg business flash. >> thank you very much. netflix posted the strongest growth, despite raising the prices, they added with analyst expectations and now have 125 million customers. >> the strongest start to the year since the company first went public. we are also seeing the revenue grow at the fastest pace in

history. truly hashat netflix the netflixr and company said they will release 700 pieces of original content and they have taken top talents from fox and disney. isoncern that investors have bay, which should stay at as long as they use the money for growth and this is lifting the tech sector and we are seeing shares of top tech giants rise slightly. for bloomberg news, i am selena

weighing. mind the gap. this is what we have for you. they are going to spend a billion dollars and this allowed them to boost sales and is a splendid reflection of doing and creating something to give a product and does this create value for you? this sector has been under pressure recently and we all the why. looks strongospect would look at the tech

value ind there is and we seecyclical the group as quite attractive this is the result and there welcome. >> you would like more hardware and this is a stellar set of numbers of death >>. tackare at play in u.s. right now. versus and that

is the regulatory threats to that model. it is a thing that rules and we will see regulation and more of that over the years, but will that stop the growth prospect? we do not believe so. they have proven resilient and each have something unique to offer and they may be over the short term and there could be an arertunity, although there believe thatnd we this is an interesting position. is theof the stories

what trump has been propagating has been america good overallthis for the tech trajectory? moves with tech in global growth don't do any good in the medium-longer-term. againsee this happening and it will be a concern for the ,arket and for us in the sector but this seems to be a itatively isolated issue and is not like they have disappeared, so i would not read too much into the headlines and andhould remain contained

across for the group this point. >> we talk about geopolitical tapsrns and this story into that. and how to the attacks developments?ese >> the good old-fashioned market believes that there is an andrtunity to have these there is opportunities that are not necessarily related to what is happening here.

the regional level is presenting more opportunities than last year. >> very quickly, rounding this going up towards $80 a barrel. >> it is approaching the top of the range at this point and we expected to remain relatively up for this par the market and these are within a broad spectrum of assets and something we are looking at as attractive. >> thank you for joining us.

next, we are live in beijing with the latest.

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manus: from dubai, i'm manus cranny and this is "daybreak: europe." anna: manus: and i am anna edwards in london. these are today's top stories. manus: china holds up, the world's second-largest economy continues to grow amid strong consumer spending. we are live in beijing. president trump plans to nominate -- as he built up our team -- powell's team. manus: earnings for netflix despite hiking prices, the giant posted the strongest subscriber growth since going public 16 years ago.

welcome to "daybreak: europe." we are back in black. has lifted itself into the black for 2018. european equity futures are rising. we talked about it briefly with our guest from j.p. morgan. political risk is below zero according to j.p. morgan. china growth held up and consumption is putting on the board today. in the u.k., theresa may faces weitical challenges, but will get the post-brexit high. will it continue. wage data comes in later on. fx wars as trump takes a pop at the ruble and the yuan. welcome back. anna: a bit of breaking news coming through.

the twoer of corporate's reporting through, numbers coming in from jb but interesting to see if they see anything about the state of the u.k. consumers. profitdjusted operating 308 million, above estimate. the full-year revenue number beats the highest estimates. talk about what has been going on in the markets more generally. radar behindisk me. a mixed reception to the chinese data. down by .2 percent on the asian equities session. disserviceeptive -- to other data. jpmorgan saw the numbers is pretty decent. we will put the dollar index because despite the fact president trump has been accusing the chinese and russians of currency manipulation, the u.s. currency went lower as a result of his comments. the aussie dollar on the move

against the u.s. currency. markets generally low, shrugging off a bullish assessment of the australian economy from the rba. partly because of what they had to say about inflation. inflation is on the minds of many of many who are watching bond markets right now. like quite a bit of primark. 9.2 below estimates. let's look at the bond market. chinese andht the equity markets are higher carried the s&p 500 is back to black but china has boosted holdings of u.s. treasuries by the most in six months. strikeole story about a by china, abandoning the bond market is perhaps overplayed. saudi arabia in the gcc is also back at a record high in terms

of their holdings in u.s. treasury markets. you have 2.75%, 2.8% off the bonds months ago. two-year paper is gaining a little more than 10 year, so you are seeing that spread flattening. a 10 year low at less than 45 basis points. o.a.t.'s are down a pet. five pips.own we have some big guests, don't we? anna: the oil market is at the center of those conversations today. the executive director patti barrel joins us for an exclusive interview. what will he say about where he wants the saudi oil prices to go? and were opec is planning take take the global glut story. how much they want to address that in 2018. let's get the first word news update. judge-- ed: a federal

denied an initial request to keep documents from the fbi last week of his lawyer michael cohen. prosecutors were ordered to make available to cohen's attorneys all documents seized. cap sing time, it was revealed: michael cohen-- had represented sean hannity. donald trump has put the brakes on a preliminary plan to impose additional economic sanctions on russia according to "the washington post." forsure a -- preparations fresh sanctions caused backlash at the white house. the -- economic rating. the white house has announced donald trump's intentions can for the richard clarida

federal reserve. if confirmed, the global strategic advisor at pimco would replace stanley fischer, who stepped down in october. he fills out the leadership of jerome powell -- team of jerome powell, followed by john williams as head of the new york branch. china's holdings of treasurers rose by the most -- treasuries rose by the most in six months, even in a trade tensions between the economies. according to data released by the u.s. treasury department, china's ownership of u.s. bonds, bills, and notes increased by 8.5 billion to $1.20 trillion. china remain the largest foreign creditor to america followed by japan. may is to face a second debate in as many days on britain's role in bombing syria. latecomes after she stayed last night in the house of commons listening to lawmakers views. she was present for the 6.5 hours of proceedings, including more than three hours answering 140 direct questions from mps as

she saw to demonstrate her commitment to parliament in the face of allegations she had rushed into war without seeking proper approval. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ed ludlow. let's check on markets in asia. here is sophie kamaruddin. sophie: a big takeaway from today's session in asia with a mixed data we got out from china. industrial output growth moderated that consumer spending looked robust. when you look at the response in mainland markets, you have the shanghai composite set for a fourth day of losses. hang seng also edging lower. pressureers under after the u.s. hit cd with an export ban. in japan, stocks fluctuated toward the close as investors play a cautious ahead of a trump-abe summit and in seoul, the kospi is slipping. looking at stocks we are watching, -- jumping after three months sales picked up.

operators gaining ground after -- lifted its profit forecast for the industry. losing over 9% after a rival cancer drug submitted its -- anna: sophie kamaruddin in hong kong. china's gdp grew 6.8% in the as robust consumer spending is booty -- helping buoy. industrial production grew six points -- 6%. let's go to tom mackenzie in beijing. what does this data show us about the chinese economy? those numbers i just read out paint a picture of the reorientation of the economy we are seeing away from industrial toward retail and consumer. tom: you put your finger on it. i think it is a clearly key takeaway. 10.1% is the number in march, but strip away that a little and

you see online retail sales year up 35%. clearly, china's consumer feeling pretty bullish. that is softening the edges of the economic picture as you see a tighter credit environment, particularly for corporate's. we saw industrial production, that came in at 6.8%. slowed as well. numerous saying this is about the rebalancing away from the old economy toward the new, services making up 60% of the gdp. there may be further pain in the next few quarters, but longer-term, he says this will lead china into a healthier economic direction. tom, how are these trade tensions between the u.s. and china playing out? anna and i have referenced it a couple of times, trump took to twitter last night, when after the chinese and russians in terms of currency manipulation. it's hard to see where

president trump is coming from on this issue because china has capital controls in place and it also has its trading then, but it hasn't widened it in a long time. isn't even talking about doing it in the north term -- near-term. it is doing the opposite, it could be argued. you saw the exports for the month of march coming in below expectations. teacher het having a rating effect on the gdp number, not in the first quarter but of course, there is a lot of focus on the potential $150 billion worth of tariffs trump is looking at imposing. anna: on the corporate side of inngs, i know your location china has something to do with this story. the targeting by the united states of the telecoms gear maker's et -- zte. what is the story there?

tom: this is the beijing headquarters of richard clarida, a major -- fraser perring -- zte. they are now banned from buying chips and modems from microsoft. they say they are doing this because of some of the business dealings with iran and north korea and the fact they compensate -- confiscated some of their staff for that. butonly does it affect zte, -- the number one telecom provider and number three smirk -- smartphone maker. the sparks concern in china about further barriers on their corporate access to tech knowledge and innovation. that is a big concern for the people we speak to in china. they are far more concerned about that than trade tariffs to be honest. manus: it is all about access to

the value chain and going up. who wants to make jeans anymore? china correspondent tom mackenzie in beijing, joining us in the studio. at -- wong, investor here we are, looking at 6.8% private consumption is robust. if you look at the chart, the question is this. there is a bullishness in terms of where the analysts think -- there is an optimism in what analysts actually think. how optimistic are you on china, given the data sweep you have seen? >> good morning. we have had a great set of numbers from china in terms of the growth, showing the economy is fairly resilient. if we look going forward, there has been some drop-off in the momentum of the leading indicators. i would expect growth in china moderates going forward. think -- is your

view on china hedged to the ability to maintain the status quo? is that the most important thing in the minds of the chinese leadership and on which the markets will measure them? and i am talking particularly about trading relationship to the united states. monique: in terms of the trade picture, it is still in the trades that type of realm. we don't expect the next relation -- exclamation -- escalation into a trade war. that is a risk, but we expect china will maintain the status quo going forward. the recent comments we have heard out of president xi last week has been fairly conciliatory. andas made some concessions i think the and i think the path is going to be toward resolution rather than escalation of what we are seeing going forward. manus: one of the things the world is preoccupied about -- we csia shakedown in the

of thekets because intervention risk in hong kong -- what extent do you want more exposure to china? i you prepared to take more exposure to china now in absent yet of the detail of what happens on trade and tariffs? monique: i'm going to say that because we see going forward in moderation in chinese growth, we have actually reduced some of our emerging-market exposure because in 2017, e.m. had a great year. we've use this as an opportunity to take profits, reduce that, we see china spreading to the rest of the e.m. and have put that in developed markets. anna: that is your stance on the broader e.m. picture. i want to ask you about russian equities, because that is nothing wewe've talked to you at previously. how comfortable are you with a long russia equities stance given the tweets from the white house, given the sanctions imposed by the united states on russia? monique: let's take a step back.

invest in emerging markets coming your effectively taking on geopolitical risk. that is part and parcel of emerging market investment. you are right, we own russian investments and russian dollar bonds. the entire time we have rocked -- owned these ross and ash it -- -- russian assets, there have been sanctions. we abide by these sanctions. what i'm going to say is that if you have these geopolitical events and you have perfect foresight -- which means that in the current set of events, if knew on this day come at the u.s. was going to expand the sanctions it is imposing on russia, then you should have sold. knew on thisif you have perfec, because the market tends to overreact in response. we know the sanctions were imposed on several individuals and several more companies, but entire market has taken a

hit. russian equities are down in dollar terms some thing like 12%. anna: so you will be staying with this trade because you think it is oversold? monique: yes, and when you are in it, it is too late. contrarian behavior is to look for opportunities to buy. manus: and you would be happy to take some russian risk on. entire market has taken a you talk about the indicators and we like that. have a look at this, because this is one of those great assessments of geopolitical risk. it is the bank of america merrill lynch risk monitor. it looks a currency, equities, commodities. down for a third week am a 55% below the five-year average. does this build the case for rrianology and where are the other contrarian trades? give me something in currency and the bond world. monique: so, i'm going to say i'm not ask -- surprised by that and we are contrarian investors.

where is another contrarian trade? i think the uk's something that is interesting to look at. think you can equities are attractive at current levels. investors have become overly pessimistic with regard to u.k. equities. if you look at surveys, they are max underweight u.k.. unloved,ay they are unappreciated, and under around. if you look at -- >> some people would say that is my position on this show. under loved, under owned and undervalued. anna: that is a horrendous allegation. monique, does that have anything to do with the pound? has come back a lot and that can be negative for u.k. equities. monique: we have seen underperformance with the ftse

500 -- ftse 100 with the pound but that is not always the case. in 2017, we had some appreciation of the pound but also the ftse 100. the positioning is no longer short with regards to sterling. it is a little long, but the positioning on u.k. equities is maximum underweight. i think that is a much bigger contrarian signal. kuntzmonique wong at stays with us. coming up, trump announces a pick richard clarida and. the international agency's director joins us for an exclusive interview at 10:00 a.m. u.k. time. where can oil really get to? this is bloomberg.

♪ manus: it is a lot downtown dubai, 10:21 -- that is a live

shot of the studio in dubai. let's look at some of the markets. dubai is up and running the past 21 minutes. dubai, our markets in just off a shade, a little lighter. euro stoxx 50 set to rise by 11 pips. backutures back to prettier. on the u.s. sex -- equity story, netflix storming home last night. let's get your business flash with edward ludlow. ztethe government has said dominated -- violated a settlement and has imposed a seven-year ban on crucial american technology needed to keep it competitive. securitytional cyber center warned the country's telecom companies and regulator ztenational risk from using

services cannot be mitigated. netflix has posted its strongest subscriber growth since going public 16 years ago. the company added 71.4 million users in the first quarter of the year, topping projections. that is in spite of raising prices for most customers the last few months. netlist shares rose in after-hours trade. anna: thank you, edward ludlow with business flash update. announced hisas intention to nominate richard clarida as vice-chairman of the federal reserve. joinadvisor at pimco would join jerome powell at the bank. monique wong still with us. not someone we know personally, but someone bloomberg knows very well. an academic record and

real-world experience. have you view the overall path of the fed right now? gradual seems to be the mantra we get. do you still see a gradual fed inside -- in spite of short rising in the united states? monique: academic record and real-world experience. have you view the overall path of the fed right now? we still see a gradual fed. the 2018 story is good growth in the u.s. and a pickup in inflation. the deflator is in the mid- ones. to 2.5,he will pick up but we won't see a blowout in inflation. i think we will see something in line with the fed minutes -- see three rate hikes this year. one we have already seen. the bond market probably hasn't priced in enough inflation premium. i think we will see bond yields higher eventually. one of the things the bloomberg intelligence team divined this morning from the china data wasthe bond market 't priced in the knew credit impulse. new credit as a percentage of gdp.

maybe i'm going inside baseball, but the percentage of new credit relative to gdp is declining precipitously. that has global implications in the global reflation story of which china is the bulwark. monique:yes, absolutely. if we talk about global inflation, global inflation is generally on the rise. but we don't expect -- we are n inflation blowout type of house. inflation will rise progressively throughout the globe. that is a slightly different story for the u.k. i don't know if you want to talk about that. anna: let's do that. in on the u.k. because i know you have thoughts on where you think inflation will go. how strong it remains or to what extent it comes off those recent highs. monique: the key for the u.k. will be the wages number out this morning. it is probably more important

than the cpi number tomorrow. it sounds counterintuitive, but the bank of england has guided us toward a may rate hike on the back of their view of accelerating wages. actually makes it easier for them because it is less of a squeeze on the consumer. a wage that if you see number that is higher than 3% this morning and it is not impossible, because we have tight labor conditions in the u.k., the bond market will price a may rate hike to perfection and there is a residual risk start tomarkets extrapolate and think about normalization in the rate cycle. manus: monique, thank you for being with us this morning. cable trades at 143.62. goes.see where the wage will we hit 150 on the radar? anna: that is it for daybreak europe. european markets, the open show

is next. we will bring you the interview later. there will be conversation around the oil markets. european futures point a little higher, as do u.s. futures. this is bloomberg. ♪

♪ guy: welcome to "bloomberg markets: the european open." i'm guy johnson in london aside matt miller in berlin. castrate less than 30 minutes away. -- cash trade less than 30 minutes away. china goes shopping. retail sales keep the economy on track as the industrial sector in q1.- slows asian session mixed. most markets going nowhere. european stocks are pointing higher at this point.