♪ anna: good morning from european headquarters from the city of london. i am anna edwards. manus: i am manus cranny. this is "bloomberg daybreak: europe." these are the top stories. anna: did a caterpillar scare away the bulls? manus: a new accord, emmanuel macron once a new agreement with iran. president trump warns tehran about restarting its nuclear program. president trump: they will not start anything or they will have bigger problems than they ever had before. anna: earnings season is in full

swing. ♪ anna: very good morning everybody. this is "bloomberg daybreak: europe." the swiss banking giant, credit -- they sayxpect their confidence and growth , they arein wealth also giving a revenue number. francs.llion swiss they seem to have beaten on the top line. the first is the estimate the company provided.

analysts have been to some extent lower in their estimates for credit suisse. business is akets big focus in these numbers. it will be interesting to see how they do in terms of the fx, because of pricing of a large number of products they offer. profits, quarter net let's get a comparison. , we will bring you a live interview with the credit suisse ceo. he will be joining the bloomberg team after 10:00 a.m. u.k. time with francine. one of the most important financial institutions, systemically important, i am talking about the net income of

that missed estimates. the net interest income. when it comes to capital, that is better. the top line coming from the company is now through the most of cnet risking the bank, the bank needs to get back to focusing on customer business. they are confident the net profit will grow in 2018 versus 2017. they're moving headquarters to helsinki. this is about market share. ,onfidence about net profit credit quality is the strongest since 2007. we will speak to the ceo a little bit later in programming. this is the french

software business, one of the top 10 providers of global software. there are seeing their second quarter, this is the eps number at a range -- in terms of the backward looking number, against an estimate. it looks as if that number is a shade above the estimate. the revenue number comes into shape, broadly in line with the estimates. will beof dassault speaking to us shortly. on the risk radar, we have fascinating news in the overnight session in the united states and into asia as well. this is what we are seeing in markets in terms of equity reaction. the you blame it on lackluster tech earnings, or caterpillar and what they said about the high watermark being in the first quarter?

that is a big question for markets. u.s. 10 year is at 3.00. that is the big number we are watching. 9995 is what i have on my screen. the dollar in general reached its highest since january in yesterday's session. i think the fiver is in the post as far as the bet from me to you. a rising tide lifts all boats, what am i talking about? the global bond boost. there is your 10 year benchmark rising. keep an eye on the sixth month paper and one year treasury bills. the highest level since 2008.

that becomes a real asset. you have rising treasury yields all raising the global boat of yields. this is the bloomberg barclays global aggregate return, the highest since 2014 and rising. what happens to duration? do you need to begin to shift down? that is a question for the bond market. we had the start of the 32 billionffering, sold into your paper last night. that is the highest since 2008. watermark in earnings, jamie dimon worrying about pressures and margins. the rhetoric is divorced from the actual numbers of the earnings. anna: or maybe the expectations are so high.

this is the picture in the futures into the u.s. session, nervousness remains. the ceos we will be speaking to during this program in the next --r and a half, we will talk lots to talk to him about. washington, let's go to juliette saly with the bloomberg update. juliette: french president emmanuel macron wants to negotiate a new agreement with iran that would curb its development of ballistic missiles. halting itsto nuclear program. that came after president trump --ned iran not to start its restart its nuclear program even

if the u.s. withdraws from the 2015 accord. >> we are not in a vacuum. we should not terror apart the jcpoa. it would not be a good solution. juliette: iran has warned it would abandon the nuclear deal if donald trump pulls the u.s. out. the foreign minister also told the associated press that america had not honored its earlier agreement. >> united states has not lived up to its side of the bargain after its commitment to lift certain sanctions. not to impede economic relation between iran and its partners. it has done all of that. it has dissuaded, threatened companies from engaging with iran. juliette: donald trump has signaled a shift with his stance against jim -- kim jong-un.

months after the riding the leader as rocket man, he now says he is honorable and hopes they meet soon. tone, he hadarmer a strong message for pyongyang. president trump: very simple, they get rid of their nukes. it would be easy to make a simple deal and claim victory. i wanted to get rid of their nukes. juliette: steve mnuchin will head to china and the next few days to begin direct talks on trade. president trump says he thinks there is a good chance of a deal being done. proposeds he has billions of dollars of tariffs on chinese goods, and says they will take effect as planned. the european union would be prepared to offer britain a better trade deal than the one that gave turkey. unionstays in the customs after brexit, and listens to views on trade policy.

the official said britain would have to give up autonomy and would get a seat at the negotiating table, but it would be possible to stipulate a dialogue on trade, and the block would take a pragmatic approach to such a setup. global news, 24 hours a day on air and at tic-toc on twitter, powered by 2700 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . asia,kets here in investors try to work out what the breach of the 3% yield means for sentiment moving forward. you have a yen weaker for a sixth session, the japanese stocks also under pressure, led by industrial players. hong kong and china's markets, after a strong rally yesterday. you have seen weakness in those chipmakers. australia and new zealand are

out of action today for holiday. weakness in india, downgrading its forecast of the repeat as it goes from -- the rupee as it goes from bad to worse. caterpillar warned its earnings in the next quarter could be as good as it gets. ltek is one of the worst performers when you look at market movers in the region. it has been downgraded by morgan stanley and is adding to ongoing concerns about the chip industry. au is offong, wynn mac by 3%. investors -- analysts, i should say are scrambled to adjust their forecasts for wynn macau. manus: juliette saly there with the latest on the markets. theear bond yields in

united states crack the 3% levels for the first time in four years. that.reflect on this is the chart i started the show with. this is the rising tide that lifts all boats. global bond yields are on the rise. welcome to the show. we have run the numbers and spoken to the analysts. 3.15% by the end of the year really? is that as high as the estimates are, that is not a dislocation moment for markets. mike: i agree with you. i think we could see bond yields higher by the end of the year. it is unlikely to be dramatic. several factors suggest bond yields won't move too much higher from here. we are seeing a lot of lead indicators suggesting inflationary pressers are starting to build. that probably does take bond yields higher. i think we go 325 i the end of

the year if you look at the survey, three and half seems to be the threshold where managers would be more concerned about equities and start to see u.s. treasury yields as more attractive in terms of a by. we are some way away from that threshold. 3.5% is the number we need to watch. in markets yesterday we saw nervousness in equities. we have breaching of the 3% level. we have guidance from caterpillar that caught the market off guard. talking about the high watermark in the first quarter. yesterday we saw equities, from the caterpillar share price. aboutor you is your worry this earnings season? do they have to do with the first quarter being the high

watermark? we are not worried about earnings, we think they will come in strong. if you look in europe, the estimate is we have 9% earnings growth. that is factoring in the fact that we are seeing an appreciation in the euro for the past year. for every 10% higher that you go thatade weighted euro, shaves 3% off european earnings. even with that, the 9% earnings estimate is beatable. what you are seeing in the u.s., mr. carney's report we are seeing about 0.5% on stocks to be. a little bit on the downside if they miss. if we get beat, in the u.s. and the eurozone as a whole, we will

get more feeds then mrs.. than will get more beats mrs.. the dollar is rising. bank of america came out with a lovely line this morning. trade hasensual macro an implied short dollar position. to that extent, if we get to 325, does that permeate across nasdaq, euro, yen, and emerging markets? is there more risk for em than bm in his reconstructed market above 3%? short term, there is the potential the dollar could go higher from here. our view is against the euro, by the end of the year, you will see the euro strength against the dollar.

what is being remarkable over the last couple months, if you look at the surprise indices, the data is coming in weaker than expected. expect onnormally that backdrop to see more euro weakness then you have. the euro has held its ground. we are now at the point where the european data in terms of the relative surprise will start bottoming out and get better. that could put upward pressure on the euro again in the second half of the year. anna: mike, thank you. .et's bring you an update the numbers look broadly in line . let's talk about the outlook. the first half, smartphone demand was week, but they see healthy demand in the second half with a strong backdrop. this is a chipmaker.

nervous in the u.s. and asia because of lackluster reporting particularly around things -- we will continue to watch. manus: everybody is keeping focused on those technology spots. we are joined for the first interview of the day. this is bloomberg.

♪ anna: the morning, this is "bloomberg daybreak: europe." 6:20 here in london. 1:20 in singapore. technology in focus.

very muchd yields are in focus. let's talk about oil. norway's state oil company, first quarter profit increased petroleumrising prices and higher output. joining us now on the phone is .ldar saetre, ceo, statoil great is always to see you. give us the highlight of your earnings picture. but i wanted to start with your expectations for the oil prices. you talked in february about $70 a barrel would average less than that then more in 2017. do you think oil price comes down from here? , it isink the oil price fundamentally a lot of volatility. what we see his storage levels have come down to more normal levels. it is more receptive to

geopolitical events which impacts the oil price. that is what we have seen. let's see how the market takes it. $11 billion is the number. let's see how the market takes that. my question is in terms of $11 billion in investment, when prices rise, it is easy to take the foot off the gas, excuse the pun. is it going to be hard for you to stick to $11 billion given all your activities and what you are doing? is that going to be a challenge to keep the lid on $11 billion target? to keep the foot on the gas and make sure we continue to improve, it is really important. we see glimmer -- growing pressure in industry.

for us to keep the momentum and keep costs down is important. we are able to keep our operating costs at the same .evel that is really good news for us. 11 billion was the guidance we gave in january. 2.1 billion in capex this quarter. we will see a slight increase in activity. that will bring us to around 11 billion. all around our project portfolio has a high level of efficiency so we are comfortable with the 11 billion number. anna: we have spoken to you many , the as the ceo of statoil next time we speak to you will name. ceo of the new the name has been talked about a lot. it references quality, and you are putting 85% of your

investments into oil and gas rather than renewables. is that an up-to-date number, 85%? eldar: basically we are investing into oil and gas. we will gradually increase our investment into new energy solutions. renewable energy. we have given a guidance about 15% to 20%, that says something about the direction of this company. grow our oil and gas production for the next year. expenditure, that is explanation for the change of name, the broader energy company and the new name fits better. upus: you are a man who adds

barrels on a yearly basis. big oil is producing the most amount of money in nearly 12 years. our prices rising? is he getting more expensive to buy the production? first of all, we focus on exploration. seven wells so far this quarter, two discoveries. we always look for opportunities to add resources through acquisitions. this will depend on the heat of the industry. these market so far we see some increase, but there is still room to do good value enhancing transactions, and we have demonstrated that on recent transactions. briefly, when you evaluate

new projects, do you attach a lower profitability threshold to them? is that well understood in the organization? is that the way the industry operates these days? eldar: did you mentioned the renewable? anna: yes, renewables. eldar: obviously, you have to look at the nature of these assets, and the risk profile of these assets. that is different from oil and gas assets. reward, andt risk risk-adjusted return. it makes sense if you relate this to the risk for these types of assets. reign,long may she helping everybody in the industry with the cash flow in 12 years. lifell bring you our

-- only onith 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.

this is anna: "bloomberg daybreak: europe." -- let's get a broader market check. nejra: asian equities are following u.s. stocks lower. we are seeing msci asia-pacific down today. across the board. the hang seng down. australia is looking the trend. it is not, those markets are closed. is this all about the 10 year treasury yield? it hit 3% yesterday to read it did not manage to close above it. where were you when it closed about 3%?

looking at the 3% on the 10 year yield, we are below it now. what you want to note has to do with volatility. when we saw that 10 year yield aboutigher after concerns wage inflation in february, it was accompanied by increased volatility, at least higher than where we are now. be drivenit seems to by commodity prices. does that mean it is more transitory? treasury volatility is subdued compared to back in february. have a look at this comparison with the 10 year chinese yield. we are 3.6% on that. that premium has been shrinking. it hit its lowest level since december, 2016. this is because of the prospect of slowing economic growth.

mind, the last time this happened and we got to these 2016 isetween 2015 and only thought devaluation. will there be concerns around that? speaking of volatility again, this is cross asset. some people are saying, equity volatility, you have s&p 500 volatility, the vix in white, the euro stock volatility in yellow, and currency volatility in blue. none are as high as in february. does that mean if it ten-year year yield stays above 3%, we will not see the same equity selloff we saw last time. manus: thank you very much, nejra cehic. the ceo joins anna and myself.

good to see you this morning. thank you for joining us. i referred to your report. you say underlying revenues are softer than expected. you say the challenges for the business, you will increase focus on improving business momentum and talk about risk compliance. how do you plan to build and improve business momentum? what measures will you take? say i am pleased with what we have done. when you look at the net profit line, we have better profit than last quarter, which was a week quarter. callve delivered on what i the important components, cost, credit, capital, and compliance, which are the basis of driving the bank forward. the top line is

softer. i am confident the net profit line will increase. we are working very much on the income line, and we have been focused internally for the last two years. we worked on our risk operational platform. we can be customer focused and increase that momentum. we are well-positioned to deliver. i expect at some point a weaker income line in the first quarter. somewhat disappointing on that side. we have full focus on the customer side. anna: combining those things together, you are internally focused now you will focus on the customer. you said you are a little disappointed on the revenue side. what measures can you tell us

you are putting in place to focus on the customer, to deliver on the top line? casper,: all businesses are different. we are operating in four businesses. it is customer momentum. we were somewhat weaker on the corporate side. we already see a stronger second quarter. we will close in the second quarter, and activity was good in the first quarter. measures, and after having an inwardly focused organization, now we can focus throughout the organization on customers. i think that will actually yield results. we are well-positioned, and

particularly only a cost capital credit and compliance in place. it is a good platform to take forward. we have made major investments on digital deliveries, and you will see more on that side. well-positioned to deliver going forward. manus: last week we caught up with jimmy dominant -- jamie dimon,. i know your region is different. you are jumping from market share, give us a sense, is it rising? are you having to eek away at margin to sustain margin shares on the corporate side? i think the nordic market has been a competitive market. i don't see anything new. in this stage of the cycle there is more pressure on margins.

more clients go to the capital markets. i think the competitive situation per se has not changed. i think we can compete. it is important to have a inad-based business platform terms of geography and business segments. we can generate the required momentum that i think we need to deliver. approvedr shareholders your move of headquarters to howinki from stockholm area are the plans progressing? any updated estimates on how this will affect capital requirements? casper: i think it is too early. we are working to make sure the move takes place, that we are in the banking unit by october 1.

is wek my own expectation will go into the banking union with the same requirement. movever did that on that for capital reasons. i think it is too early to say. once we are in there, we will have to return to this question. manus: you are one of the bank ceos worth taking an opinion. let's get the casper von koskull take on 3% bond yields. how dramatic is it? casper: i did not hear your question. manus: how much volatility will 3% bond yields bring to markets? think we will see.

there is a risk with sudden unexpected movements in yields for bigger dislocations. i think the underlying liquidity is not the same as we have seen in the past. i have always said we should be prepared for big movements if and when that happens, and higher volatility. something iainly talked to our corporate customers about, to be aware when and if that happens, and if it happens fast and unexpected, we will seek quite volatility, so be prepared. anna: thank you very much, casper von koskull, ceo, nordean bank. the banking sector will have a live interview with the credit suisse ceo after 10:00 a.m. today. soften thetics never

global market. president is proposing a new nuclear deal with iran. he hopes to persuade president trump to state in the accord. may 12 is the deadline for the u.s. in a state visit yesterday, president trump criticized the iran deal. president trump: this is a bad deal. it is about structure. it is pulling down, it should have never been made. iran is the key focus for president marcon. what did macron managed to achieve? two big issues are around iran. we have not heard much on trade. ine: macron did not get

major concessions from trump, neither on trade or iran. he managed to preclude these new that wouldran include ballistic programs, regional containment of iranian influence in the region. fare is no guarantee so that france will remain past may 12. this deadline, this is what trump said during the press conference, nobody knows what i am going to do on may 12. macron has a pretty good idea. he did not get a major concession on trade either. he did not manage to make the waiver permanent for european steel and aluminum.

achievements for a emmanuel macron. one thing though, he managed to make trump say he will remain in syria until the mission is achieved. anna: it is a three-day visit, so maybe there is still time. especially with the relationship on full display. trump was cleaning emmanuel macron's suit at one point. was the special relationship more for show? caroline: their special relationship was throughout the day. they love to smile. had many handshakes. we saw trump taking some dandruff off macron's shoulder. macron will go down as

one of the greatest presidents in history. we will have to see if trump remembers that special relationship when the deadline comes. anna: thank you very much. let's talk about the european story. president marcon has gone to visit president trump and the agenda is around trade. back at home, macron wants to .onvince europe to do reforms how do you see his chances of bringing the rest of the eurozone with him in terms of that reform agenda? >> i wouldn't hold out too much hope you will see significant moves. they want to refer to the fiscal union, but the steps towards that are going to be incredibly slow. attempt to take

some kind of crisis to enable them to move forward to the next step. at the moment there is no real pressure there from markets. controlled ins the periphery. i think you're going to need during the next recession some kind of flareup the for the europeans take the next significant step. we have seen a little renaissance in the dollar. the euro has a feel of trading, when you look at the european earnings story, has the euro headwind begin -- began to dissipate. that is two times the consensus projection.

it is basically based on the idea that if the eurozone growth is tracking it -- tracking at around 2.5%, that would give you 50% earnings growth. if you look at that, you will save 3% off of that, you've got appreciation in the euro the last year. the tax cuts have been fully factored into u.s. earnings. probably around 2% in terms of the impact of the u.s. tax cut on european earnings. it is quite possible we end up with double-digit earnings in europe this season. anna: the ecb had its meeting. they have penciled in 2.4% gdp growth. suggests perhaps the ecb does not need to adjust its guidance on the growth

number. do your forecast factor in that weaker d-day -- that weaker data that we had? mike: at the beginning of the year, you look at the pmi's, the euro was going to grow at 3.5%, which always seemed far-fetched. now, you saw the slowdown in the last few months in the pmi data. you get moderation in that pmi data is concerning because it could mean you're going from great to good, or there is a material slowdown. april confidence that it was just moderation. growth will come north of 2.5%. have seen in confidence points toward the picture whereby actually it is the moderation that the 3.5% growth rate was never realistic, but we can deliver decent growth rate. go good to and i

great every day. at the bondook market? treasuries will hit 3%. if treasuries hit 3%, what does it do to the boone market? does it duplicate the european equity story? the highest since 2009. mike: i think bund yields can go higher from here. we are quite positive on the outlook for european financials, on the view that you do get buttoned yields going higher -- bund yields going higher. manus: thank you very much. that is mike bell, asset management global market strategist, jp morgan. you are not going anywhere, you are staying in the chair with us. a reminder to our bloomberg users, you can interact with the charts.

you can even adjust the charts. , we sit downup , and also onrman the barclays board. mike rake. this is bloomberg. ♪

♪ manus: welcome back to "bloomberg daybreak: europe." let's get your business flash with juliette saly. juliette: credit suisse has reported income for the first quarter that the analyst estimates. 694 million swiss francs.

revenue topped forecasts. we will bring you our live interview with credit suisse ceo after 10:00 a.m. u.k. time. the japanese company increased its bid for shire to 46 billion pounds. shire said in a statement that theboard is willing to put proposal to shareholders. citigroup is restructuring its credit markets municipal securities and securitized markets operation into a unit. assume their post atop the business as credit markets steps down and takes a leave of absence from the company.

that is your bloomberg business flash. anna: thank you very much. 2018, let's go to our what is thenmarie. story? exposed? the most it is volkswagen. they have the biggest exposure in china with 15% share of the chinese markets. they import hype premium markets. the carmakers should benefit whichever way tariffs swing. vw brands sold more than 4 million vehicles in china in 2017, that is equal to 1/8 of the total you can see in the bottom panel. analysts do not expect the strategy to change. bmw, toyota, and daimler along

with volkswagen were responsible for 70% of the passenger vehicle imports in china in 2017, each company having up to 30% sales in the region. china will allow foreign carmakers to take full ownership. you can see how much of a share they have here on this chart. finally, the china auto show will be about electric vehicle markets. holds 60% in the world. yesterday, toyotas china ceo said the country is in position to lead the world and auto technology. you can see that here. they are crushing it when it comes to moving forward in the ev market. at can accept these charts gtv , assetmike bell

management global market strategist, jp morgan is with us. 5.5% of the world's market is up from 3% four years ago. we have a big week for tech. have you look at tech at the moment? you want to load up on the drawdowns? how do you want to play it? , in europe and asia, but in the u.s. we are more cautious on tech stocks. we have a preference outside of those fantsngs. anna: what do you prefer? mike: it is not just within tech, we view technology coming through on industrial names in europe. we like the technology think playing out.

we have an interesting update talking about how the first half being weaker. there is a lot of concern around anything to do with smartphones, the suppliers of smart phones. the you share a concern? mike: i think some of the chipmakers, we are bullish on the long-term outlook, not just because of what is going on with the smartphone story. the potential for these chips to go into things like cars and other products. there is not just the smartphone story. there is a long-term structural story that is quite positive. anna: mike bell, asset management global market strategist, jp morgan. we have plenty coming up on the program. rake.l talk to mike let's see whether that

real discussion about the 3% yield is a dislocate her. what does mike rake have to say about this? that is what i am focused on in the next 30 minutes. ♪

manus: good morning from dubai. i am manus cranny. this is "bloomberg daybreak: europe." anna: these are today's top stories. manus: stocking 3%. of stocks fall on the u.s. asia as the 10-year yield history for your high gas hits a four-year high. emmanuel macron says he wants to negotiate a new deal with iran. >> they are not going to be restarting anything. big problems, bigger than ever had before. credit suisse,

accelerates as assets soar. we'll have a sit down with tidjane thiam. ♪ manus: a warm welcome to "bloomberg daybreak: europe." we have these equity markets setting up to do battle royal with a 3% target in the united states. i am talking about yields. highest since 2014. goldman sachs says this is a passing moment. we have more breaking news coming in. we are kicking it off. you have lloyd's. anna: lloyds banking group giving us their numbers this morning. mixed against the estimates. the first quarter strategy, 1.6 billion, that is ahead of the 1.3 billion as of last year.

have improved. -- they have improved but against the estimates, perhaps if you look at a profit numbers, 2 billion pounds versus 2.0 8 billion -- 2.0 8 billion. this is against the estimate. 1.5 pence per share. against an estimate of 1.8 pence. that is a bit light. for anyooking commentary they have to say about the housing market. this is a big player. largest mortgage lender. ppi, should there be one? all a big focus at this bank. more from the european banking sector this week. we will bring you the interview at tidjane thiam after 10:00 a.m. we will be speaking tomorrow with the barclays ceo, jes staley.

let's tell you what is going on in markets. mcmanus, you have the futures. the asian equity session looking lackluster. .own .5% technology a concern for investors. the earnings season, bond yields going over 3%. 2.99 -- the bloomberg u.s. dollar index up .2%. dollar strength coming through tying in with the yield story. the strength in the yield. manus, you have more breaking news? at paint of longer and a couple coffee do not go together. split, it going for a think everybody and bloomberg knows what kind of brand i like. the de-merging cost of coffee, what are we going to get? was 580.5.e

the de-merging cost of branding, there have committed to that. they will remain the owner of premier. you think about beer, hotels and coffee. revenue side of the business, the .3 billion. the big red headline is the demerger. what is that mean for the dividend story? what does that mean for the recompense for the shareholder? that is going to be the focus and they expect to do it in the next 24 months. they can complete a critical transformation on infrastructure improvement. that is the line coming from them. anna, i told you about the bond market. it is not that you and i haven't battered this one to death. in case there isn't anyone who didn't get the headline, not only did we get 2%, we traded through it. the market believes that the

bond yields in the u.s. will be no higher than three by christmas. you can morgan says that is the level, the median of 56 analysts we spoke to is one in the same. jpmorgan says it is a step up. inthe contagion from their terms of the ratcheting of yields? if there is an explosion higher, we caught up with a number of voices that said, if you see a compounding of rising rates in the united states, that could have a contagion effect on yields. we have that discussion through the week. let's get to juliette saly. we can ask her what her favorite coffee shop is. juliette: french president wants to negotiate a new agreement with iran that would curb its development of listing missiles and contain its involvement in regional wars. that came after president trump warned iran not to restart its

nuclear program, even if the u.s. risk -- u.s. withdraws. combine our we can common views and our differences because we are not in a vacuum. we should not terror apart the jcp away and have nothing else. it would not be a good solution. juliette: iran has warned that it would most likely abandon the nuclear deal if donald trump pulls the u.s. out it told the associated press that america had not honored its earlier agreements. >> the united states have not lived up to its side of the bargain. that is to its commitment to lift certain sanctions, not to impede economic relations between iran and its partners. it has prevented basically dissuaded, threatened companies from engaging with iran.

juliette: the european union would be prepared to offer a better trade deal than the one he gave turkey if it decides to stay in the union after brexit and would listen to u.k. views about policy. the official said britain would have to give up its autonomy it would not get a seat at the negotiating table when the eu makes deals with other country, but it would be possible to establish a dialogue on trade and the bloc would take a pragmatic approach. global news, 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . here in asia, where that that affect in the u.s., investors wondering whether 3% yield moves -- means moving forward. we do have australia out of action today but the japanese market closing lower about .33%.

that is dollar strength as a start to see the dollar steady somewhat, but you have seen a weakness coming through in a japanese machinery players. the chinese market coming off of yesterday's gains. having a look at some of the stocks we are watching. komatsu in tokyo, we had that morning coming through from caterpillar which saw its shares fall in the u.s. trade. komatsu down by 3.4% on the close. the cato under pressure, and one point on the most in five years after it increased its bid for shire. investors now wondering if this is too high a price to pay and have extended those talks until may 8. great wall looking good in hong kong. 5.25% coming through with first-quarter earnings.

raising the company to a by with a price tag of 11 hong kong dollars. this is china's largest suv maker. .nna: thank you the u.s. treasury yields have hit 3%. the first time in four years. the stock from the united states to asia has fallen. trading as focus on well. michael drake joins us -- mike rake joins us. let's talk about some of these global themes people where higher interest rates. -- global themes. let's start with higher interest rates. the rhetoric from the white house comes quick and fast and the potential for policy change kind of quick and fast. how much disturbing business? michael: the global economy has been growing and picked up momentum in europe and emerging

markets. it is slower in the u.k. we have seen a much more benign environment. the concern of business is we should not have the unintended consequences of unilateral actions backfire and don't work. we have seen that before with the bush deal tariffs seven or eight years ago. they had to be reversed. we encourage this global trade. we recognize some of the issues that have arisen and we are developing these markets which are important for the west. manus: mike, great to see you. please explain to me how you think as a leader when you see tweets and news reads from donald trump about tax, about trade deals. what goes through your mind as a board member at board level mike:g a global company? what all business people want is

stability and continuity and a clear policy direction that we can follow. of course, people don't like volatility. we have to get used to managing volatility. the general view is that common sense prevails, that the concerns expressed by the president are so expressed, but then there is a proper discussion around the implications of that, the unintended consequent is of unilateral action. it seems the president makes statements which reflects concerns and some of his voters but he does come back to can -- come back to discuss his original statements. anna: you do a lot of traveling and you talk about equities in the u.s. you have done a lot to develop business in the u.s. and u.k.. -- are they being very doal? mike: what we have to is make very clear that the

arguments of a strong economy, making jobs, bringing people out of poverty across the world, it allows for free trade which encourages the capital markets to work efficiently and effectively, not excessively. the international chamber of commerce, many organizations reflect on the facts and listen to global trade and the benefits it has brought, as well as the doesrns and causes who causes for some people who feel left behind. manus: just to pick up on one of the last global themes. xi jinping is trying to put itself for that put himself forward at the vanguard of globalism. there is this movement by the administration in china to open up to the world, to open up finances, to be more

deregulated. is this puts the -- is this tangible? you have dealt with the administration's over the years. are you a believer? look, and economic level, we have seen massive progress from china. massive opening up of their markets. it is still strict in some areas. presidency --at president she does want open up china. without china, global trade is now picking up more broadly. during the six or seven years after the crash of 2008, we all relied on china to drive the economy and i think that is important. tradeent xi for global and for the wto. that is much to be encouraged. anna: the customs unit -- union is the issue of the week. the brexit cabinet will meet

today and there could be different views around that table on the customs union. what is your message around the customs union this week? mike: consider the facts and evidence and then make a decision that will be right for our economy allowing a period of transition. community that we should stay in some form of a customs union. we have integrated supply chain. is critical to our manufacturing industry. it is not just the tariffs, is the nontariff barriers to trade. anna: you have been pro-the customs union for a long time. does that mean we don't worry too much? michael: let's remember that the european union has a serious -- a series of treaties around the world.

nothing is going to stop this trade. as much to china as we do and korea, we have doubled our exports to treat a -- to korea on the back of a new treaty. 80% of our economy is from services. we can engage in discussions with the eu on services and have different treaties around the world. that is something we should think about. anna: manus? manus: mike, i like the way you use the word "some form of customers union desk customs union." borderd solve the irish question for this administration which is proving intractable. do you think this would split the government and cause theresa

may to have to follow her sword? -- to fall on her sword? it is a big line for theresa may. >> our cabinet needs to sit back and look at the facts. in relationpromise to what the eu is still a country of 65 million people. sensible,e a pragmatic one in deeper than the turkish one. it is an entirely different situation that we have. they need to look at this in a very careful manner before they come to a conclusion. hopefully, the house of parliament who has voted to trigger article 50 will have the opportunity to reflect and debate and discuss the issues around the application on jobs, investment in the united kingdom in manufacturing and longer-term. to be clear, what this is what

much or prior -- much prefer to stay in the customs union which support. it is creeping so many jobs in this country and across europe or anna: used to be on the barclays board. watching from the outside, what you make of the equity investor in what he was to do. do banks such as barclays survive? mike: there? 's about how -- there are question marks about how -- you have a british-based bank and do not have any corporate banking within the u.k. how large that investment bank capability should be, i haven't been on the board for two years, it is a question mark. barclays is making progress. it is important to us. it is good to listen to activists. it is better to engage with them and see what they feel. then to assess that your

strategy remains valid or not. rick -- mike rake joining us. thank you for being with us both . let's give you a snapshot of the market struggling with the new world of 3%. there is our dubai markets. a two-year low on to buy. -- on the by. you are seeing this rise in yields around the world. the highs yields globally since 2014. bund yields unchanged. there is no doubt that ten-year benchmark, we're just below the 3%. new curves would be 3.18%. let's check on you as features and see where we are right now on that story. u.s. equities closing down.

was there concern about monuments? is it concerned about technology? all of that has been something of a theme? manus: yes. let's talk about dassault systemes. a 9% boost inosed the annual dividend. confirmed 2018 targets. joining us now is bernard charles. thank you so much for being with us. talk us through the business because you are at the front end of global industry. how strong is it? we just heard from mike rake talking about global growth. morning.good there's something very interesting happening if you look at the beginning of this 21st century. there's a profound transformation of the industry.

we have seen the digitalization in many economies. the industry is changing in its own way. we are moving from a product economy to an experience economy. it is changing the food categories that companies are creating. you can look at new transportation, so the virtual aspect of creating new experiences is creating double-digit growth that we have seen. it provides visibility for the long-term. something is happening. anna: what does that mean for dassault systemes? do you seeunities for your business in the future of transport? whether that is autonomous vehicles? whether that is car sharing? to create those, you in modeling,ose

simulation. this is not possible without our platform. basically, 80% of what is underground is done with dassault systemes already. this is now becoming software, not only the physical set -- this will aspect of the car, as well as electronics. how do you integrate those? how do you reorganize your company's? we have seen the tesla signal. succeed. it has changed the categories of products that people want to get. this is happening everywhere, there are 600 significant projects in the world which are in mobility. manus: can i pick up on where you go next as a business? we talk about the drone industry.

yet there is error not it customers. -- you have various aeronautic customers. would you use explosive? how is it going to add to your business if we leave the cars aside? the number of projects around the globe is exponential. the reality of those projects concerns how many of those are going to be produced. companiesows is that are trying to imagine new solutions whether it is delivery across countries, whether it is about surveillance, security systems. i think this is unstoppable. it provides new kind of solutions, new kind of automation and the relation -- the regulation, we'll have to

change soon. furthermore, look at what is happening in china. they are ahead and growing technology. theeans they are taken mobile phones and taken the next step. they are ahead in technology. they are ahead in let's go bike. this is -- in electrical bike. this is changing the category of what is available to citizens. enablerhe center on the of this to happen. anna: you seem optimistic around technology, around chest rotation, around chest rotation. what about the threats? europe's case and calm down the white house around protectionism. are you concerned as a french

business in the united states? bernard: it is creating concerns. i don't think that this will stop. the dynamic of companies to innovate and invent new solutions, whether it is in energy or mobility. any other topics like this. i don't think it will stop that. it will create constraints, but the business will when. -- will win because new solutions are needed for more sustainable world. a cruciallity is question. how many cities is concerned with pollutions? but on as in the news long-term perspective, it is an anecdote. go,s: before we let you yesterday we had -- macron must

do more for france. what would your message be to macron from an industry leader viewpoint? one line from bernard charles. bernard: industry is important. he knows it. we have to think differently about the kind of solutions that our countries should provide to citizens and consumers in the dynamic of innovation is the heart of creating new part of the ecosystem. welcome to the industry renaissance. anna: thank you very much, bernard. industry renaissance, i like that. very nice line. bernard charles, the ceo of dassault systemes where had a busy day. suisse wealth management booming.

one of the headlines causing the bloomberg. we have comments coming through from tidjane thiam. manus: we had ubs at the start of the week. at this when you look at what tidjane thiam has done, it is up 66%. is question i've that task there all chasing -- surely, you run out of your average billionaire, there's only a finite number of them. in the end of the day, he is trading at a run. that is what the market likes. tidjane thiam delivers. anna: that is coming up later. there are plenty more billionaires. manus, keep an eye on whitbread. .he company announced

lloyd's reporting numbers. that is it for "bloomberg daybreak: europe." the european open is up next. ♪

guy: you are watching "bloomberg markets: european open." londony johnson at our headquarters. matt miller is off today. cash trading 30 minutes away. ♪ good morning. tidjane thiam bet on wealth management has paid off. credit suisse easily beating estimates. the ceo will join number television for life interview at 11:15 a.m. in zurich. decatur tumbles -- takeda