♪ anna: good morning from bloomberg's european headquarters in the city of london. i am anna edwards. i am manus cranny live in dubai. this is "bloomberg daybreak: europe." these are the top stories. anna: a secret visit to north korea to prepare for a summit with trump. the president holds talks with abe at mar-a-lago. manus: the president plays down the central bank gradually raises rates. headache,esa may's the brexit bill goes to the

parliament with a look for amendments, including staying in the eu customs union. ♪ anna: a very good morning. this is "bloomberg daybreak: europe." let's talk about what is going on in the asian session. thatrday, china, and bigese banks, and the other news is that earnings season. we have a backdrop for asian equities to go higher. the msci% on asia-pacific. reddit markets in china, how much is this changing the chinese banking system. we will talk more about that. the broader picture is one were equity market investors are

encouraged a little bit by the strength of the earnings season. we will continue to watch that. we are putting the dollar against the yen, we see reduced tension in fx markets. the cia director mike pompeo has had secret meetings with kim jong-un in north korea. what does that do to the likelihood between trump and kim? that is something markets are focused on. markets, where up by 0.5%. rebounding as you let -- u.s. stockpiles decline. everybody needs that. that is the target. we spoke with goldman sachs, the backdrop to mar-a-lago is not about suntan lotion.

it is about the deficit that has not changed much in the past seven years. japan andn between the united states. this is the import export scenario we have at the moment. the exports rising by 2.1%, much less than what the market anticipated. what does that mean? the chief economist of the imf at the world bank meetings suggests that the first shots have been fired in a potential trade war. with that in mind, the imf says there could be trouble ahead. solid growth for the next two years, but then you have data warning about japanese exports. you look at the bank of america merrill lynch survey, and only 5% of that survey are globally bullish. that is the lowest rating since 2016. data, on tophard

of sentiment, and you are left with more issues. that you areabe is less important to the north korean discussion. you are less important to me as a trading partner. last week they discussed going into tpp. today it does not seem that is remotely on the agenda. we are keeping an eye on everything they say, watching and alsomeeting watching european corporate's. the markets are updated on second-quarter sales. 2.4estimate had been billion. they're looking to edge that number a bit higher. the first quarter net sales is also coming a touch above estimates.

that looks strong. they're getting an update on ultraviolet machines, big pieces of technology that they manufacture for the chip sector. let's talk about where we are in the u.s. futures picture. we talked about the asian session, the u.s. earnings story , this is the picture for futures. we are expecting them higher at the start of the trading day. wto fromenges to the president trump. canadian trade minister will londoning us at 11:00 time. we will be joined by an exclusive interview. cia director mike on pao

traveled to north korea over easter weekend to meet kim jong-un for a possible summit with donald trump. o as secretaryompe state raises optimism that it could produce a deal. larry kudlow says the trump administration is considering more sanctions against russia. he asked if nikki haley got ahead of the curve by announcing them publicly. haley said steven mnuchin would announce fresh measures than following day. takes theams, who path of the new york fed has played down risks of the yield curve becoming inverted. thaturrent san francisco chief was speaking in madrid. we will continue on the path

of raising interest rates. this will keep things on an even footing. we reduce the risk of getting to a point where the economy could overheat and create problems that could end badly. >> u.k. prime minister's brexit strategy faces a renewed threat when it returns to the upper chamber in parliament. they are seeking to amend it. a proposal to bring in the customs union from the eu made pass by more than 50 votes. theresa may has rejected business demands, saying it would prevent the government negotiating trade deals with other countries. the ceo of southwestern airlines is facing a major test as they grapple with the aftermath of a fatal accident. assistingr is

investigators in probing the cause of the engine blowout on a boeing 737. one woman died from the shrapnel from the blast 20 minutes into the flight from new york to dallas. the wife of one u.s. president and mother of another has died at age 92. her son, from a president george w. bush, said in a statement his family is saddened by the death of his mother. president donald trump said he and the first lady join the nation in celebrating the life of barbara bush. global news, 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries. twitter -- tic toc on twitter. getting markets are stocks rising for the first time this week aided by earnings hope. 22,000 for the first time.

will geto see if abe trade concessions from trump. pboc seems to be driving sentiment away from stocks and into bonds. with that backdrop, let's look at stocks on the move after the pboc policy tweak. to benefit from higher profits. , at lastuto markets word chinese top ship makers rising as the u.s. reminds beijing of the need for homegrown chips. kamaruddin with the latest on the markets from asia. the japanese prime minister shinzo abe is meeting with president trump and mar-a-lago to discuss trade. -- theoming there

incoming secretary of state mike pompeo is said to have met with kim jong-un. the north korea problem has been with us so many years, it is something that should have been taking care of years ago, decades ago. it is at a point where we do not have a choice, it must be taking care of one way or the other. i look forward to meeting with kim jong-un. now, jodining us schneider. what can we expect to find out ?rom pompeo's meeting will the summit go ahead? is it about denuclearization or capping the current level of a nuclear arsenal? us the facts tell that mr. pompeo who is still the cia director hasn't not yet been -- he has not yet been confirmed

for secretary of state. the fact that he went and met with the north korean leader and other leaders is a good sign that the talks may take place. without those pre-discussions, it would be a lot less likely that they would be having the summit. it looks like a sign that this will take place, or has a greater likelihood. president trump meeting with prime minister abe in florida at his resort said there have been these high-level meetings, and that he wanted the talks to happen in june or sooner. all signs seem to be headed towards these talks. they're talking about where to hold them, not in south korea, not in north korea. perhaps in geneva boards somewhere in southeast asia. there is all that talk about specifics. what they are going to talk about is the real issue. that is not what we have heard

too much from officials. the north says they are willing to discuss their nuclear program , and what they might be willing to do to move forward. but the specific nature of the talks is still what is elusive. anna: we will wait for the specifics. abe and trump seem to be working to the same ends on this at the moment. unable to be set on trade. what else dominated discussions? jodi: it is largely about trade. prime minister abe is likely to be disappointed because president trump, in a tweet, for theis not transpacific partnership anymore. last week he seemed to indicate he would be willing to go back to the table on the tpp, which

when he took office, he said the u.s. would not participate. now he's back to saying he does not like it. he said there would be too many contingencies, that the u.s. would have trouble getting out of. this is something that prime minister abe has been really pushing. he and the south korean president very much want tpp to go forward. it looks like now, at the moment, the u.s. will not participate. president trump and prime talking abe will be about trade and ways to move forward on trade between the two countries. hesident trump has said prefers bilateral agreements rather than the multilateral s like tpp. anna: joining us here in london, head of market strategy. thank you for making the trip to see us. let's talk about global risk and

where you see this manifesting. the yen is weaker today as a result of the talks between united states and north korea. how much hope does that give you for something fairly substantial on the geographical front? >> clearly, i am not a foreign-policy expert. this one flew over the cuckoo's nest foreign-policy and trade policy, it is difficult to forecast what trump is going to tweet next. i am not sure that he is reconsidered the -- reconsidered tpp. he thought it was not a good idea, and stuck haley in the default -- difficult position. we would like a calming affect on the geopolitical situation going back to fundamentals which allowed trade. what we are seeing is if he moved forward with the agreement, that will calm

tensions. anna: you are looking for a calming? i'm not sure anyone will oblige. peter: every night that is what i pray for. let's go back to fundamentals and boring monetary policy that will help us in trade better. these random tweets are getting exhausting two years into it. manus: you better take some vitamin tablets. that seems the consensus in the market. anna and i look at this one chart. doesn't send warning shots to you? is the chief economist at the imf right? the first shots have been fired in a potential trade war. we have an upswing for two years, but growth is poised to slow. what does that mean for currencies globally? idea that the the

global slowdown is now moving forward is being led by the removal of free trade. the fx market is the most obvious, the commodity play. how that plays itself out, the, oddities surplus. it is dependent on the free-trade ability. , oilu start locking down which is starring to tighten. it changes things dramatically. a lot of our trade in the short-term is based on this restriction of trades and how that affects commodity prices, and oil importers and exporters are the first to look at. difficulties in where the next week will come from, and that they will be

backed up by policy and actual measures, what is the latest on your trump playbook? peter: our playbook is simple. we believe the trump administration likes to push whatever issue to the absolute extreme, whether domestic or international. then backtracks and rolls it back. for what wasg successful in 2017 because it is based on that idea that trump does not ever push over the edge. tpp, we thinkade, those type of extremes -- anna: the return of volatility. peter: i think we have a higher moving average on vol. and the heighta on sunday andas

monday. there were drastic measures taking place. we think it will be an all-out u.s. russia conflict, no. that is what we have seen from trump so far. manus: we have much more to get through. anna: later, oil update. opec and russia are set to meet in saudi arabia. this is bloomberg. ♪

♪ john wall yams, who is due to take the helm of the most powerful fed in new york -- john

williams, is due to take the helm of the most powerful fed in new york. the u.s. central bank gradually raises rates. >> the fattening of the yield curve that we have seen so far is that normal part of the process. somewhat, bute up it is totally normal that the yield curve gets flatter during a tightening. up,re treasuries are moving -- 10 year treasuries are moving up. of anot see the signs inverted yield curve. manus: it is all totally natural. john williams san francisco federal reserve president. peter, when you hear that it is at whaty natural, juncture does that move beyond normal? peter: i think williams is

clearly -- what is he going to actually say? history shows that when the fed starts in a tightening cycle, the risk of recession increases exponentially. he is not going to play that in a polite setting. are moving up substantially. i do not think we will see a significant move in the long end that will reduce this flattening any time. i think the markets are significantly worried about a misstep. it has happened in the past. despite rea's -- reassurances, it is something that needs to be highly considered. anna: how do we factor in the question of tariffs? he was asked about this, and he says he does not seem too concerned. whether the tariffs imposed by the u.s. administration and that being

inflationary. he says it depends on a host of matters. whether they are transitory. peter: if you start having tariffs, they are attacks on people, attacks on less discretionary spending, a constriction on the consumer. i do not see it playing out any other way. there are variables how they materialize, how trump them into effect. ,t is the consumer that pays and the economy is dependent on the consumer, so taxing that portion is a dangerous effect. pitted -- i just pivot? central is doing and how shinzo abe's polling is falling off a cliff. japan might be freer. if there was no shinzo abe, we

would not have abenomics, but with the bank be freer and more level -- liberal? peter: the short-term of moving abe would have an appreciating effect on the yen. i think there is a point where we are in an exhaustion level at the boj where they have bought everything. they have lowered everything. there is not much in the current playbook that they can use. removing this hurdle, which is maybe that opens up ways to stimulate inflation outside of what they are using right now. is wed also say that abe can from a political standpoint, and we are saying that transmission via the lack of involvement with the north korea and u.s. negotiations. i think that is a clear, apparent signal in the market. anna: it is interesting he is

talking to trump in mar-a-lago this week. peter: after the disclosures were already made. shocked that this has happened. he did not say, i knew it all along, good one trump. it seemed like, what? anna: it seem like many others are surprise. briefly, what is your view of the dollar? this chart shows how japanese investors have been selling. does that continue? peter: i think so. if you remove the top line geopolitical trade that is powerful right now, what you have is a differential in monetary policy divergence, and the likely trajectory for the fed is a slowing of the tightening cycle. it is already, six heights -- the boj is moving toward

the exit. manus: more to come. this is bloomberg. ♪

♪ mumbai.ive shot of a.m. in what is an amazing city. india could be the biggest victim of them all in regards to global trade wars. let's talk about a company looking to make the world better. one cup of yogurt at a time. this is dannon. first quarter sales boosted by dairy and baby food. winning the war of yogurt. millennial have changed the food industry, the numbers 4.9%.

4.2%, trouncing the estimate of 3%. nutrition up 14.5%. these are a cracking set of numbers. it is all about socially responsible food, and that comes in the form of 30 for percent -- 30% of their products. it is about the millennial's. they are interested in whether yogurt comes from. there are numbers out speaking of french corporate wealth. the estimate was for 12.4, ahead of estimates. they are confirming their guidance for operating profit growth in the full year.

the question for these numbers, how was the chinese new year celebration going to drive the business? they sell later than was usual this year. as if things have worked out well for them in asia. also, news coming through the property sector. offering a $1 billion for a stakes in a couple of businesses. we will watch that consolidation story. tell us what is coming up next. modi: i mentioned that will meet with theresa may. everybody is speak to says this east. pivot point to the speaking of india, theresa may, and modi, they will meet later

on this morning. was met by the british foreign secretary last night. johnson, on twitter, said there were a lot of issues to discuss. government reporter in new delhi. what are the biggest issues? is it immigration, trade? point livethe pivot for the theresa may and modi get together? >> for the u.k., this is about seeking closer ties with the world's most populous country. the u.k. and theresa may are hoping to lure india closer to its orbit, including in the commonwealth. they will be pushing to have india reduced tariffs, including which werehiskey, raised the last time in india.

for india, the calculations are different. morewill be pitching for a liberal approach for visas for indian students and workers who live in the u.k. he is unlikely to secure the broader access he wants in an era, the brexit era, controversy about immigration in the u.k. anna: theresa may has already made a trip to meet modi in india. that was awkward. the subject of immigration created some of that tension. what are we expecting? >> the last time she came she landed in the middle of the controversy on immigration. at home, she would try to limit immigration from the eu. when she arrived in india she met modi who was pushing india as a global power, and seeking access for india's high-tech workers and other workers around the world including the u.k. we can expect a busy schedule.

modi is meeting theresa may for breakfast. he will be meeting the queen. iscannot forget that modi not just in the u.k. on this trip, he already met nordic leaders in sweden, and he is tacking on a trip to germany to on the end ofrkel this trip. anna: thank you very much for the update. along with posting commonwealth leaders, theresa may has the issue of brexit to contend with. there is a renewed threat with the house of lords seeking to amend her flagship bill when it returns to the parliament upper chamber later today. , head ofenstreich market strategy, swissquote bank is still with us. it is interesting to talk about what the lords are trying to achieve. this is reading between the lines, but it seems there are enough in the lords with a consensus party does not have a

majority, to try to get the country to stay in the customs union. the one i have already with the eu. is this a game changer issue on up?h, or are we caught it has moved away from the short-term brexit inducing panic that we have seen the last two years. towardket is re-shifting boe and away from the sausage making and drive volatility recently. it is the sanity in traders. peter, very good day to you. winning when it

comes to that. , this is the performance of the pound. it is paste ahead. someone say it got ahead of itself. do you believe the inflation carney said we were frightened about pay rises. do you think that story has changed? peter: yes, i think when you take away the fear of mass migration of jobs back to europe, and you have the of the u.k. economy, you have a good position for labor and workers. i think that has changed the last six months where the story that everyone in the financial services in london were going to be cut in half, and everything would go to frankfurt, has now

allowed that to start improving. that should trickle into broader inflation. i think the pound story has gotten a little bit ahead of itself. i believe the slowdown we are seeing from the domestic side should curtail further upside but the 12 month looks positive for the sterling. anna: this shows it is unwell against the dollar but not the euro. when do we see a change? not seem to reflect bank of england versus other central banks. peter: we think europe is in a better position than the u.k.. they have a strong domestic market. whatever happens in brexit, it can rely on itself to produce growth.

we think that temporary sluggishness in the eu growth remains relatively robust. that will put the ecb on a clear path to normalization. i think in terms of the eu at boe story, it is the eu that will come out ahead on this one. we will see the euro outpacing sterling. given that you have flown in from switzerland, where are we on that debate? a couple of years ago, the question is, is the swiss selling running out of momentum? on the your perspective next move on the swiss franc the euro and the dollar? peter: i think the swiss is on back footing against both currencies. -- s and b is not going

anywhere. it favors any other currency other than the swiss franc. that thateculation slowly grinding higher inflation and switzerland would force the s and b to react, that is clearly not the case. the swiss franc as a global safe deceleratedcy has recently. there is sensitivity to the global macro event is not playing through the swiss franc haven as it had before. it is more regional european event risk that is driving the swiss franc. syria,u have events in if you have concerns about the u.s. china protectionism, and you have a safe haven trade, it is not picking up well in the swiss franc. there is risk aversion

standpoint, the swiss franc is not playing through. ball, it is not playing and that is not cricket. , head ofenstreich market strategy, swissquote bank , thank you for being with us this morning. you can browse our charts. excellent charts. we will talk to peter shortly about what is going on in emerging markets. opec in russia prepare to meet in saudi arabia. north korea dominates talks in the states as shinzo abe meets with donald trump. this is bloomberg. ♪

♪ 1:44 a.m. in new york.

what is the next move in trade wars? fantastic piece out, worried about dividend yield and two-year yields. two-year paper versus the dividend yield. let's get your business flash. >> good morning. rio tinto make cut aluminum production. they are expected to produce 3.5 million metric tons of aluminum this year. they said those figures would have to be revised after it completes sales in iceland in finland. cuts may have to be made due to sanctions on rusal.

narrow a and no revenue growth, -- narrower profits and no revenue growth. five years of revenue declines. starbucks is set to close half its stores in the u.s. on may 29 four an afternoon of bias training. the coffee giant tries to restore trust. according to bloomberg calculations, the move could set $22.4he company which had billion last year. open the first cinema in saudi arabia later today. that is after the kingdom lifted a ban on movie theaters. amc said it will show all the appropriate new releases. it hopes to have 60 more by 2030. that is your bloomberg business

flash. manus: thank you very much. now to the oil market. opec and russia are set to meet in saudi arabia this week. although wiping out the global glut. will they threatens supplies further? the group seems determined to keep the cuts. my coanchor yousef gamal el-din joins us now. you look at the latest compliance numbers, and this is what the focus in saudi arabia will be. is at a record for a fifth month. is that sustainable? yousef: that is that question. the exercise for this meeting as part of the monetary committee, to collate this data out there, and help the decision-making body. willof the key attendees be the likes of saudi arabia, russia, kuwait, there is no short -- no shortage of

importance and import names. agreement hashat been going on. you look at the realities of the oil market were you see countries making a lot of money replenishing their coffers in a time where they are struggling, or shifting their policies. saudi arabia, venezuela, a ron -- iran. the saudi's are talking about $80 per barrel, and the willingness to over tighten. the question will become, at what point do you tighten too much and risk that the pendulum swinging too far to the other side. reason opecid the had to take these actions, because they are not the whole market, not the whole story when it comes to shale in the u.s. can you run us through some of the highlights? the numbers for global

inventory, one benchmark that opec and non-opec like to use in these meetings, but the other benchmark they look at is what is happening with u.s. crude inventories. we get a flavor of what to expect from the official numbers . inventory is falling. the bloomberg survey for the official numbers suggests a rise in those inventories by 650,000 barrels for the official beta is released later wednesday. .orecasts have been updated they are saying second-quarter brent is up to $69 per barrel from $60 per barrel currently. they point to the fate of venezuela and other opec members. manus: thank you very much, yousef gamal el-din. we will have full coverage. let's talk about russia.

does it open up other opportunities in emerging markets space, including hedge funds? they say they could benefit. is in thenstreich studio in london. we are talking about the price of oil. to what extent do you believe in the continuation of the upside on the price of oil, and to what extent do you want to be long? i think being long, the oil exporters right now given the macro picture is a solid bet. route they have gone under recently, it makes it a very tempting long trade to get in. of the cyclical nature of oil that we have seen, when the price does go up, the reaction function in the u.s. is relatively steep.

they do put on new supplies quickly to take advantage of that high oil price. that seems to be capping oil the last five years. i do believe we are not going to go significantly higher. it is a good time to say places like russia and malaysia, good, strong traditional oil exporters could improve on the back of this. there is obvious he sanctions story in russia as another dimension. let's talk about other emerging markets. we've got a nice chart showing how in india and the philippines have underperformed the asian fx space. peter: a little caveat from my time here, we are shorting the vol, as ahort term trade we are running consistently. this idea of risk in syria and

protectionism is one we trade against. and quite effectively. taking indonesia, india, the philippines, the tiger cubs, we have a strong cyclical and structural upturn which will be present even if we do see slightly higher oil prices. good economic see fundamentals, strong demand, good foreign investment, and opportunities. anna: you see opportunities here because the concerns around geopolitics and trade have been overdone? peter: absolutely. we have back-checking from trump on the russian sanctions. monday he was going to put it on, and by wednesday he is not following through. this worked out well. getting ahead of this, especially given opportunities we have seen, depreciation and hourspee in the last 72

does provide a good opportunity. manus: where do you stand on the ruble? we are getting different views. seeing it as a buying blackrock is a little more cautious. how do you look at the ruble at the moment? reiterate, we continue to stable-ish on emerging markets. -- we continue to stay bullish on emergency markets. we do not see a trickle through to deeply on the sanctions. prices, itgh oil makes it attractive story. three months ago, if you look at every analyst call, the ruble, india, we are on the top of those lists. suddenly we have short-term hype, issues in syria that need

to be dealt with and done correctly, but these are strong, good economic investments. anna: if you think selling has been overdone because of geopolitical risks, does that mean you think the dollar should go higher from here? peter: i think we continue to see weakness in the dollar. number one, the pricing of the fed curve is all but done. we are not seeing a benefit from interest rate differential that we expect in eight to 12 months ago. it is not a plane for bloody trade. you are waiting for that dollar all but, but we have thrown it out of the window. we also think trump is slowly chiseling away at confidence in the u.s. it is difficult to quantify, but we believe there is a spillover effect in how people view the u.s. dollar and policy moving

forward, and less likely to move into dollars as a safe haven investment, and looking for alternatives. peter, one other thing anna teased at the top of the program, we are looking at it new man in charge in south africa. they say south africa's rand is climbing up to maybe 12 on tuesday. they say it is one of the clearest opportunities in the market. is this the rehab moment for rand? peter: we tend to be less optimistic from a domestic view of south africa. we believe the political situation is fluid. there is concern about the water issue. we do not know how that will social instability.

it from a macro standpoint, we believe investors are looking for yield as vol moves back to a lower level. the flex south africa will look attractive. anna: peter, thank you very much. peter rosenstreich, head of market strategy, swissquote bank . guy johnson will be sitting down and bring you that conversation later on. 1:30 p.m. london time. south africa's relatively new president. shinzo abe is in mar-a-lago with president trump, as cia director mike pompeo is said to have met with kim jong-un. unwindingtors are their risk aversion bets as a

result of the likelihood of this meeting taking place between trump and kim. we will get analysis for you as london wakes up for another trading day. this is bloomberg. ♪

pompeo meet kim.

europe. where live in london and dubai. markets are breathing a moderate sigh of relief. anna, you did those numbers. the guidance looking good for them. it's going to be of violence between ibm, margin pressure and changing the world. futures are up. all rising. outpacing china for the first time in a number of years. play. all in

talking about dividend yields. versus those bond yields. anna: let's talk about some breaking news. we have numbers coming through on european car sales. for our focus this morning at 7:00 u.k. time. -- that's where we go for our focus this morning at 7:00 u.k. time. down 5.2% tosales 1.8 4 million vehicles. the car market shows the weakest quarterly growth in some five years. british demand plunged in the first quarter. spending sagged. three of the top five markets post march see sales declined. we see this different picture

between the quarterly and the march number. it's their weakest performance in the fourth quarter since the industrywide contraction five years ago. u.k. apprehension over brexit affecting demand in the region second-largest market. questions around these are probably part of the story as well. manus: a little bit more breaking is coming through this time from the british builder hammerson. they had set themselves up to intu.se into -- they are withdrawing their bid for intu. keep an eye on hammerson. and on his car stocks as we get into the trading day. the bond market is undoubtably one of the things we focus a great deal on. two-year papers at the highest level since 2008.

these of the 10 year government bond futures. it's this tightest spread since 2007. the fed, williams, who is going to be in charge of new york, says it's not his best case scenario. it's that longer-term yields will rise as the fed gradually hikes rates. some saying the policy is getting to a more neutral stance. you see that little bit of glimmer of hope in the equity side. yields are rising ever so slightly. curve is end of that .riced refection anna: i do not divulge the

foodstuffs that were involved in -- that were enjoyed on vacation. u.s.re in mind that the futures are pointing up by around 2/10 of a percent this hour. .7% rightpacific up now. a bit of money coming out of the japanese currency. it seems market investors are little more relaxed about geopolitical tensions. what does that tell us about the likelihood of a trump and north korea meeting? we do see some substantial upside coming through this morning ahead of that meeting. up by .9%. 67.11 is where we trade on the oil price. the south african president will be joining the bloomberg team for exclusive interview after 1:30 p.m. u.k. time. lots to talk about.

let's get the bloomberg first world news update. the trump administration is still considering more sections against russia. he added that nikki haley, quotes, got ahead of the curve by discussing them publicly. haley said on sunday that treasury secretary steve mnuchin would announce fresh measures against moscow the following day. john williams who takes the head of the powerful new york fed in june is downplaying risks of the juncker becoming inverted. the current san francisco fed president was speaking in madrid. we need to continue on the path of gradually raising interest rates. this will keep things on even footing and reduce the risk of us getting to a point where the economy could overheat and create problems that might end badly.

>> the u.k. prime minister's brexit strategy faces a renewed today when her flagship bill returns to parliament's upper chamber. keep britain in a customs union with the eu after leaving the block that may pass by more than 50 points -- 50 votes. theresa may has rejected business demands that britain stay in the union. the ceo southwestern airlines is facing a major test as an airline known for its strong safety record grapples with the aftermath of a fatal accident. special teament a to help passengers and insist investigators to investigate an engine blowout. one man died after shrapnel blast tore through window about 20 minutes into a flight from new york to dallas. >> i'm not aware of any issues with the airplane, or any issues

with engine involved. the airplane was delivered in july of 2000. the last date that it was inspected was april 15. barbara bush, the wife of one u.s. president and mother of another, died at the age of 92. former president george w. bush says his family is saddened by the death of his mother but their souls are settle because they knew hers was. that theump asked nation celebrate the life of barbara bush. global news 24 hours a day on air and at twitter. our by more than 2700 journalists and analysts in 100 and 20 countries. here's sophie. >> we have green dominating the map in asia. the nikkei closing about 22,000 points.

we will see of all they can win some trade concessions from trump. we are seeing chinese stocks get with the program reversing earlier declines. we'll check in with some other stock movers of note. lenders will benefit from higher profits. slumping ase foreign players are given greater access to the chinese auto market. the last word on the aluminum space as producers try gains in the metal. aluminum prices of the ellen the surging towards 2500 books. goldman has raised its forecast for metal to 3000 in the near term. anna: thank you. quick word on some breaking news. a bit more m & a.

market caps on 129 billion euros. being purchased for 1.4 billion euros. it's is 42 euros per share. an offer of the securities of direct energy. it covers all businesses in the energy value chain including the bloomberg terminal this morning. shinzo abe and u.s. president donald trump kickoff their two-day meeting in mar-a-lago to discuss trade, defense, and north korea as cia director an incoming secretary of state ruben pompeo said to have met with kim jong-un for preparation of a possible some of the president. and north korea problem has been with us for many years and it was something that should have been taking care of years ago, decades ago. it's at a point now where we don't really have a choice.

in must be taking care of one way or the other. i look forward to meeting with kim jong-un. with this focus on geopolitics, let's get the latest. jodi schneider joins us. what can we expect to find out from pompeo's meeting? what does this tell us about the likelihood of a trump and north korea meeting? it certainly makes people more optimistic that a meeting will occur. it was just last month that president trump said he wanted to meet with the north korean leader, surprising many people. it would be an unprecedented meeting between the u.s. and north korea leaders. then he said he wants to do it soon. ofre had been a lot speculation about how this would be rolled out. now that a high level administration official, mr. pompeo, who is in charge of the cia is awaiting confirmation as

secretary of state, the fact that he has gone there and met with leaders

more optimism that this will occur. president trump said the timing was early june or before. they have begun discussing the location. not in beijing, not a north korea, not in south korea but somewhere in asia. somewhere like geneva which has hosted such things before. the topic of discussion and how much they will begin into the nuclear program and how deep the stocks will go, that's unclear and that is still to be worked out. it seems unlikely that the north korean leader is going to agree to that. what the scope of the discussions will be is still unclear. >> five months ago this is bromance personified. last week it was tpp. what else is the focus? is it going to be trade? is trump going to go back on the trade rhetoric? they need to win. the poll numbers are in danger zone. needs a win and you know a lot has happened in those five. things have not gone japan's way. some other not so great news for prime minister abe today, president trump tweeted that he is rethinking his enthusiasm discussingor perhaps going back into the tpp. he made it clear he's not interested in the tpp. he said there's too many contingencies and the u.s. would get a bad deal.

he did say he's interested in more bilateral as opposed to multilateral agreements. certainly, tpp is something prime minister abe has supported , south korea has supported, and it looks unlikely that the u.s. is going to go that route. president trump's tweet makes that clear. jodi schneider, senior international editor. join us on set is ben kumar. have you with us. when you listen to jodi, we could barricade about whether be a good deal of that deal. we could spend a lot of time talking about that. this is a global growth story. chief economist has said there's a potential for a trade war.

poised for an upswing. global growth, is intact? you are agree or disagree? what the risk? ben: i think it is intact. look at the g20. every single one is going to report positive global growth. you don't see that too often. the imf's right to warn about the impact of trade wars. it's why people are paying more attention to tweets and pay mark attention of these kind of summits. the current tariffs that have been revealed on china have been suggested and a tit-for-tat return aren't going to impact global growth meaningfully. they won't impact global trade. it keeps growing and growing and growing. it grows outside of the u.s. and china. there are companies are desperate to increase the amount of trade that goes on.

think global growth story is going to get better. we have spoken to a number of guest that agree with those views. trump talkssident big according to a threat of the actual plan ends up as less. is it a little premature to dismiss his challenge to global trade as immaterial? ben: i don't think it's immaterial but i don't think it will derailed the global trade train. no one has been able to stand up to globalization. there hasn't been an economy in the world, maybe north korea but things are going to welfare. globalization is very powerful. the u.s. is 20% of global gdp. 75% of the rest of the world that is desperate to become the u.s.. the way to do that is through global trade. manus: you say it's about how

much growth there will be not the size. that comesimulus down from the u.s., yes indeed, does that continue unabated or zero point? are dividend yields seriously challenged by the two-year yield which the highest since 2008? i think the point of the yield curve you are making earlier is an interesting one. it gets people nervous when you look at recession indicators. with regards to the s&p, a positive year is still in the offing. if earnings come through as expected. if physical stimulus is translated the way it should be. the s&p is set up for another pretty good year.

♪ this ishis is -- anna: bloomberg daybreak: europe. trade, taxes, and china are the main things to look for. a series of potential deals, of course. executives whose companies are revisited by your serifs are expected to be vocal on their impact on track -- on tariffs. i suppose taxes could be a big theme.

a lot of talk of the time that we saw the tax plan coming in for the trump missed ration with how much this would really impact the bottom lines of companies that pay less in the headline tax rate anyway. i guess that's we will find out. yes we will find out how much a tax break it really is. i guess the smaller companies, these haven't got tax avoidance schemes. these are domestic businesses in the u.s. that should seal the staple pass through area i think that's really interesting and speaks to donald comes heart. u.s. manufacturers that are based in the u.s. and sell to u.s. citizens, they will feel the benefit. the russell 2000 could outperform the s&p 500 again, some big we haven't seen in a while. manus: we put together the latest analysts. we've done what are cracking bloomberg posts. they are lowering their estimates for the year. they're just scaling back.

which you agree with that? would you be as temperate as you would be with the s&p? not a bad year but a little bit less aggressive than we thought. ben: it should be factored into analyst estimates pretty quickly. it's not complicated if you have been studying or looking at a company for a long time. you know the benefit of a 50% increase in earnings should be. and then you have to bring reality into effect. that's the tariffs, maybe as a slowing environment, so an analyst revision downwards is not particular surprising. though, it's still pretty good and maybe a bit more broad-based. it a bennovate -- anna: interesting to look at consumer and packaged goods.

boosted by darian baby food. for the sector of a whole -- as a whole, a under a lot of pressure. nestle, unilever, p&g. what do you expect the challenges? ben: maybe some more spinoffs. think about the health care sector. they have been specializing. you might see that in the food sector. some of those nestle businesses or maybe a little tangential now. they're not in line with the core business and that may mean they get spun off. thank you for being with us this morning. that is ben kumar. were going to have a little bit of a bid to the opening. the world doesn't seem too worried. tweet phil could overtake that. anna: watching out for anymore

tweets and the earnings season here in europe and the united states. with that in mind, we will look at those numbers. we have number so the car sector in europe. we still see hammerson making news. plus the focus on at the open. this is bloomberg.

♪ good morning. i'm guy johnson. we have some breaking news. matt: we do. good morning from heineken. earned a net income in the first quarter of two to 60 million euros. be are volume growth though, up only 4.3% in the estimate was for a gain of 4.8%.