good morning from bloomberg's european headquarters in the city of london. >> this is bloomberg: daybreak europe. hsbc buyback. europe's largest bank says it will buy back up to $2 billion of its own shares if a profit meet expectations. is an opportunity to return to the shareholders up to $2 billion in buybacks. theink that there is out overall strategy of hsbc and also the strength we are seeing in terms of organic growth coming through in a number of our markets. >> trading disappoints.

france's second-largest bank disappoints. we break down the numbers with the deputy ceo. we saw today that the outcomes, the final outcomes would be less negative. for me today, the major risk is more operational. growthconomists expect in nonfarm payrolls to rebound in april. the dollar slips ahead of today's report. ♪ anna: good morning, everybody. welcome to daybreak euro. and welcome to everyone across canada. we welcome you in. even though it is very early in the morning. breaking news.

>> breaking headlines from b.n.p. paribas. trading disappointed at socgen. first quarter trading revenue came in at a miss. 1.5 billion euros. the estimate was for 1.6 billion euros. that is the headline. meanwhile, first quarter net came in at a beat beating the street estimate at 1.43 billion euros. a little detail on the trading. first quarter, ficc trading down. equities up 19%. from a year ago. it looks like some of that could have come from the sick -- from the ficc, that miss in the trading. the french banking sector telling a different story about the banking environment.

allowing others to capitalize across the atlantic in -- and even here in the u.k. just a touchin below estimates. let us get down to the bottom. the eps come adjusted eps numbers are down below the estimate. those numbers coming in slightly shy but confirming the forecast could be another headline. there is a new ceo in the job from now. .ueller is taking over iny spent 8 billion euros the agrochemicals asset. that was one of the big deals done under the last ceo. a prolonged winter has dented .he agrochemical that also may take a dent off of the numbers. re.ooking at swiss

first-quarter net income coming in at a beach. $457 million. the estimate was 438.5 estimate. 438.5 million dollars. first quarter return on equity up 5.6 percent. a challenging time for insurers and reinsurers. anna: let us talk about the asian equity session. a negative session but not i a great margin. japan is closed as it is children's day there. we have had a host of earnings from the banking sector. a feel ont more of how their market is expecting the -- is accepting the hsbc numbers.

the bloomberg dollar index slipping a touch as we wait for the payroll number. we will get that in the early afternoon u.k. time. will the march data proved to be a temporary lull? what will we learn about wages? what will the wage story be and industry wille -- be affected by the rhetoric coming from the white house? and we also put the dollar against the argentinian peso. the argentinian central bank has had to hike rates twice in the last week. that latin american country has borrowed quite a lot in terms of dollars. we will continue to talk about that in the emerging markets as we go through the program. are focused on u.s. equities because we have seen some key technicals when it

comes to the s&p 500 and the dow jones. the s&p 500 has dropped below the 200 moving day average. and the dow jones has stayed the same. have hadsked that we such a bumper season in the u.s. had such a bumper season in the u.s. 500 did recoup. we are not getting a lot of direction. we wonder if the jobs report will give the equity market some direction. i have asked a lot of people by the equity reaction has been lackluster. some point to a late cycle. some point to the earnings. taken aboutit has two hundred days on average for the s&p 500 to recoup its losses after a loss.

if we follow that template, the 20 12 correction come in the shortest one, the s&p 500 will not set new highs until early july. for now, let us get the bloomberg first word news. here is haidi lun. u.s. treasury secretary steven mnuchin has sent the delegate -- has said the delegation has had a good amortization with their chinese counterparts. for is the second day negotiations. a white house official also said the atmosphere was positive but the real test will be china's ability to deliver on its promises on economic change. north korea has reportedly agreed in principle to accept in -- international atomic energy agency's inspections of its nuclear facilities. newspaper has said that would be with the aim towards complete

denuclearization by 2020. ix benchmark has been manipulated and that has drawn attention from regulators. watchdogs, thewo securities exchange commission and the other commodities exchange commission. one topic of investigation. socgen missing out on the trading games that boosted earnings of its american and european rivals. the front posted lower-than-expected results in its main trading businesses. one of four deputy ceo's was

named in the management shakeup. we have a lot of diversity. in terms of experience and age. that is a good asset for the group. in the ok, the brexit transition period will need to be extended for years a cousin new customs regime will not be ready to come into force in time. that is according to the senior british officials speaking who are familiar with the brexit talks who say that will be a politically explosive decision. that the u.k. would have to stay inside the union. while new border measures are developed. norway is trying to injure it will not be damaged by potential escalation of trade tensions between europe and the u.s. they want the flow of gas to

continue. the norwegian foreign minister spoke exclusively to bloomberg in oslo. >> we are in close contact with the eu commissioner to make sure that we are part of the protection measures against and overflow. >> global news 24 hours a day powered by our 2700 journalists and analysts in more than 120 countries. can find more of the top stories on the bloomberg at top . in the meantime, let us look at the asian session. were quiet today. were quiet than usual. >> japan has been a way for greenery day but overall it has been in -- on inspired.

the magnitude of the losses measured from last friday -- we are now down just 0.5%. not that steep. reflection ofate the sentiment of across asia as we move into today. eight -- 0.1% decline. a quick mention. the rba put out a statement on monetary policy midmorning. they bumped up core inflation to 2% and unemployment rate to 5.5% that they kept headline inflation and growth forecast for 2018, unchanged. stocks we are watching. hsbc. we're just coming at of the lunch break here in hong kong. -- we're just coming out of the lunch break here in hong kong. there we go. 2.4%. the earningsabout

later on but as far as a drag on the index, that is the biggest drop at nine weeks for hsbc. investors are not taking this in stride. it accounts for 70 points of the drop we saw on the hang seng. here in hong08 kong. a fair amount of drag. and health care. day that a great first people were expecting. ak sentiment here in the asia-pacific. anna: thank you, haidi lun and david in glace. -- david ingles. big focus. shares are down in hong kong. europe's largest bank also announced a share buyback of up to two leanne dollars but they said this was going to be it for

2018. $2 billion would be it. no more buybacks for 2018. it was that subject that i picked up with the cfo after the results were released. >> the by bank -- the buyback we is inced this morning line with what we have done in the last few years. from our capital management perspective, the numbers of the first quarter barrel the growth environment we are seeing across some of our home and network markets. management, wealth commercial banking. our focus is on putting our capital to work and supporting the organic growth of the firm. what we do this quarter is we are sitting on a strong position. we have been able to deliver organic growth across the company. a unique opportunity to return back to the

shareholders up to $2 billion. that bears out the overall strength of hsbc and also the strength we are seeing in terms of organic growth coming through in a number of our markets. anna: you talked about positive growth opportunities in spending the money there instead of returning more. what are those positive growth opportunities that you envision spending the money on? >> this is your much focused on organic growth. we have seen some of that coming through in 2017 as well as the first quarter of 2018. we have seen good growth come through our retail bank wealth management business. in hong kong as well as in the united kingdom. both markets which are proceeding reasonably well from our perspective. also, good progress in the commercial banks. and in pretty difficult trading conditions, trading

our growth is going well. it is about organic growth. in hong kong, the united kingdom and across the network. of course, we wait with anticipation for the strategy update to come later on in the year. how far along that process are you? what kind of update will we get alongside the second quarter earnings and strategy? >> we're making great progress. there is great engagement with the management team of the board of directors. we're working through that process and we expect to do an update for investors at or shortly before our half-year results. we will give good guidance as to how we will continue to do the good work we are doing. and how to step forward from here. anna: in terms of different sections of the bank, how happy were you with the performance of your traders?

how do they stand up to the competition? >> overall in global banking and business has done really well. great strength coming for you -- coming through our equities business and foreign exchange business. moving beyond the fixed income in the markets business, we saw a real strengthen global banking. are security services as well. the breadth of the business is important. it is well diversified from a product line standpoint as well as the geographies and the customers we serve. overall, happy with our global banking. we had a good start to the year. with our peer group, we saw things slow as we went to the quarter and then stabilized as we came out of the first quarter and into the second. we are reasonably encouraged.

andthe diversification brits of the business is really important to us. focusyou said you want to on revenues. how you going to do that? >> what we have been doing over the course of 2017 and into 2018 is investment support of organic growth in our home markets. we see that coming through in the revenues across the businesses again in the first with 9%of this year revenue growth in retail bank wealth management. and real strength coming through commercial banking. that is really what encourages investors to continue to invest and improve our capabilities from a product perspective and the overall strength of our teams around the network. also, investing in our technology platforms and digital programs to improve the quality and the efficiency of those

interchanges. investing and to continue to support that growth. the growth is there to support that. to we are committed adjusting our appetite to match our commitment to delivering positive numbers for 2018. right now, we see a pretty encouraging organic growth impairment. -- many inof them the market have been waiting for higher interest rates. what impact is that having on the day to day business? the key aspects of hsbc is the strength of our balance sheet from a capital perspective as well as from the funding and liquidity. we have a fairly robust liquidity system. move north,ar rates

that improves earnings. that is something we saw in the first quarter's numbers. building on what we saw in the second half of last year. as the rate continues to grow in u.s. dollars in hong kong dollars, that is an encouraging aspect of development for us. cfo. that was the hsbc >> it seems like investors are focused on cost gains rather than the buyback in the fact that revenue and profit that estimates. in trading, the focus when it comes to the french bank, socgen and bnp paribas who are not keeping pace with wall street rivals. anna: that is something that i interview with the cfo. it is interesting that the market is focused on the cost side. they say they are committed to the positive growth but that would have to be a great change from q1.

there is some skepticism there. and the $2 billion in buybacks -- they say that will be it for the year. some analysts had much higher numbers. that could explain some of the disappointment. let us talk about what is going on in terms of other breaking news. klm reporting numbers. notably below 2017. a fairly negative headline. striking back on operating loss was about 75 million euros. into theke has bitten earnings potential of this business. we will get numbers out of iag at the top of the next hour as well. >> that is get the book -- bloomberg business flash. failed toibas has keep peace with its wall street rivals in the first quarter. revenue from debt trading tumbled. falling 15% to 1.5 billion euros

from a year earlier. a miss on estimates. volkswagen ceo has been charged in the u.s. with conspiracy in wire fraud. winter koren who stepped down from his role as ceo days after the scandal was revealed is accused of defrauding the u.s.. contact.ney did not elon musk and tesla. tesla shares are 5.6%. it is unusual, certainly. disappointedan be

or disturbed by questions or do not appreciate multipart questions. i think the level of outright dismissiveness was unusual. >> and that is your bloomberg business flash. thank you so much. >> the latest round of u.s. jobs data is out later today. economists are expecting an april pickup. for more on what to watch, we are joined by mike mckee. fed officials gathered here for the monetary policy conference will be watching the same thing as investors on wall street. the lowest unemployment rate in almost two deities will he to rising wages. anything in the threes would be the lowest since 2000 and the tight labor market has not led to rising hourly waging --

hourly earning wages. something else to watch. labor force participation. politicians in washington sold bringing tax cut as people back into the labor force. michael mckee, bloomberg, stanford, california. anna: that is what you need to look out for. joining us here on set is lillian. great to have you with us. numbers, wethe jobs are watching for that later today. what will be the focus for you? we might get clues about how trade tensions are shaking parts of the u.s. economy. >> we have rd seen that trade

tension feeding into the market sentiment but also business surveys. we saw and the pmi yesterday and the michigan surveys that it is starting to impact the real economy. we will have to pay a close watch to that. we will focus on wage inflation. that will still be the focus. i would expect inflation to continue to pick up. we are in the slide growth slow down. that has been the commentary. willtion is lagging and we continue to see an uptick in those numbers. what is causing you a concern in the u.s. economy? we have a great charge. the national association of credit managers and their combined sex hurt dollar selection. creditors are having a hard time

collecting money they are owed. this index has dropped to the lowest since 2009. anecdotal evidence. credit market. are you seeing any signs of broader stress in credit in the u.s.? >> when it comes to the credit market, there is great evidence that you have had a big correlation between spread and qe. as we go away from the easing monetary policy, it is not surprising to see tension in the credit industry. i think the chart is telling. anna: you are missing the wages. let us look at this chart. the wage story and the unemployment rate. that just highlights what you were saying earlier. the fed making great play of the word "symmetric." what did you read in the last

fed statement? you don't get a sense that they will jump on the strength in inflation anymore quickly than they jumped on the weakness. they may allow for slightly more inflation to build up in the system and that is a positive for the market. focused on by the market. but i think it is a positive. you would rather have the fed slightly behind the curve when it comes to fighting inflation. there are a lot of worries in terms of growth late cycle. you do not want the fed to hike too quickly, too fast. >> i have been asking all week where we are in the cycle. lillian will stay with us. the outgoing new york fed president bill dudley will join us for an exclusive one-on-one

exit interview as he prepares to leave the largest and most influential federal reserve bank. we will bring that you at 5:30 p.m. u.k. time. is up next. this is bloomberg. ♪ mom, dad, can we talk?

sure. what's up, son? i can't be your it guy anymore. what? you guys have xfinity. you can do this. what's a good wifi password, mom? you still have to visit us. i will. no. make that the password: "you_stillóhave_toóvisit_us." that's a good one. seems a bit long, but okay... set a memorable wifi password with xfinity my account. one more way comcast is working to fit into your life, not the other way around.

♪ it is a 6:30 in the morning in london. the aussie dollar on the front of four. the best-performing g10 currency against the dollar in this session. gaining after the rba boosted its inflation forecast. anna: let us check out the broader trading session. >> let us start with sydney. australia is down the we do see the aussie up this morning. asian equities are trending lower. talks in beijing. u.s. officials are meeting with

their chinese counterparts as well as the nonfarm payrolls number. we do have japanese equities closed again today for a public holiday so those cash treasuries will remain shut until the european open. what is talk about the jobs number. the numbers customers are looking at. 183,000 looking for jobs a ball of economists are looking for the april report to come in at --. if you want to get in on the action, you can get to our chart and put in your estimate and it will affect this chart as well. lastly, i want to talk about soybeans. has china lost its appetite for u.s. soybeans? numbert three weeks the has dropped. the data has shown that the orders have followed. they have yet to implement

ariffs, china on u.s. soybeans. those trade talks continue to take place in beijing. nejra: quickly some breaking news from bmw coming through on the bloomberg. first quarter coming in at $2.73 billion beating the estimate. confirming its forecast. he also have first quarter sales number of 22 point six 9 billion euros. the highest ebt number at the group level since 2011. record -- a record in the automotive sector for sales volume and revenue. interesting after we had those auto sales at of the u.s. earlier this week. anna: let us talk about insurers.

the insurance business and the reinsurance business. line,ms of the bottom it looks to have improved on the previous year. the net rises by 8.62%. is operating profit number up 4.9 for -- 4.9%. nejra: let us get back to the banks. socgen missed its first-quarter estimates. falling 13.4%. overnight, the company also announced a reshuffling of the executives. caroline spoke to the manager about the reasons behind this first quarter performance. at thehould have a look

market dynamic in the first quarter. the flow equity market in the us was the biggest issue. the evolution of fixed income is demonstrating our geographic mix. when it comes to trading equities, you are not really doing as well as your u.s. peers and even not as well as some of your european peers. >> specifically regarding the overweightare more on cash and flow products. segment, we are

doing the same performance as our peers. >> do you believe the trend will continue? theou plan to revive trading revenue for the investment bank in your new role? >> in my new role, i am very much committed to the transformation. we spoke to our investment community. i will take that objective on my own and i will support the team to deliver the objective that we have. in this plan, we are focused on market share gains. the good news is that if you look at the 2017 year, the last the firmoming from shows that we have gained market share. the global franchise. that is our early target.

the focus is on the cost of management. dateeturn on equity's to is among the best in europe. but we have another target. we are trying to liquidate this part of the group. >> you are already seeing their performance of the investment bank improve over the past month, since the beginning of the second quarter. >> putting aside the global market activities, the dynamic there is huge. the returns are good. we intend to grow and catch new market share. socgen deputy the ceo. a very good conversation. that is how treasury secretary steve mnuchin describes the talks between the u.s. and china. the u.s. has reportedly turned over to china a "detailed list of tasks -- asks."

talks are expected to resume today in beijing. let us get the latest on how things are progressing with m o'brien who is -- with emma o'brien who is with us. what we know about what has happened in the talks so far? >> we know very little about what has happened in these closed-door talks. both sides have said very little. had one comment today from treasury secretary mnuchin and as he was walking to his car on the way to the second day of talks here in beijing saying he was engaged in a very good conversation with china. but we have had almost nothing unless you call the state media from the chinese side on their perspective and how they are taking these talks. we know that they met yesterday afternoon after the u.s. team arrived.

a had dinner at the state guesthouse here in beijing and they returned to their hotel at about 10:00 at night where they refused to answer any questions or make any comments about what happened that day. we do not know if there will be any press conferences or any kind of statement from either side. i guess it depends on what goes on in that room and what is agreed. nejra: how much flexibility can we expect from china on this? that is an interesting question. china has been quite quiet and keeping things close to its chest ever since the trip was announced. most of the rhetoric around it has been from the u.s. side. with minutia and announcing it eventuatede trip very quick -- eventuating very quickly after that. it suggests they are not open to some of the biggest demands from

the u.s. side. the night before me nation and the others arrived in beijing, a very senior chinese official said that these demands that china reduce its trade deficit billion, around 340 -- i am sorry, the trade surplus on the chinese side, that was not on the table. and that it curb the so-called made in china 2020 program about china pivoting its economy towards a more high tech growth picture, that they would not counter any curbs to that. it is unlikely they will give in on anything at this stage. emma o'brien joining us from beijing. and lillian is still with us. you pointed out that you get the impression that both the u.s. and china are trying to play

down expectations of any real breakthrough in these talks. in terms ofde well not sparking any market volatility if we do not get anything? >> i think it is smart to downplay expectations from investors. it sparked. saw now, markets are much less reactive. andink it will remain uncertainty will continue to weigh on the market until the midterms. it will be very difficult negotiations between the u.s. and china. i do not expect any quick resolution. maybe you will get less downside than what we had in march but less upside than we had in the equity market. anna: it is hard to anticipate that both sides would come away with something. the chinese are saying that we

do not want to move on our trade surplus with the u.s. it is hard to see that both could win. chinese play in this? devaluingalking about their currency or using that in eight will in a way that we have not -- in a tool in a way that we have not seen them do previously. these are real issues. and china will have to give in on those matters one way or another. are right, there is little china can do to retaliate on the tariff side. what they can do is more on the currency side but that would be a game changer in very negative for the emerging-market currencies and emerging-market in general. you remember what happened in 2015 when they devalued their

currency or let it slide a little bit. if they do that again, it will be bad for the markets. nejra: would it not have a more powerful impact if china tried to do something through the corporate space -- putting more restrictions on u.s. companies which would then lobbied the u.s. government? >> there is an issue at the moment that u.s. companies have less market access then it's come -- than their competitors. that is already an issue. if they were to reinforce that, we would see strong reactions from the u.s. down not likely to go well. and that could spark more of a trade war. anna: i want to ask a different question about emerging markets. last 24based on the hours in argentina. the argentinian central bank raising rates twice to try to stem the flow of currency out of their market. what has been the plight of the peso in the last week or so?

this is the mood we have seen on the right-hand side. thee two red circles are two hikes. , what willar gains that do to the emerging-market? it isis not just latin, across all emerging markets. the biggest change in the emerging-market is the u.s. libor. have an impactto on a lot of the emerging markets. also, let us not forget that emerging markets are very much sentiment driven and flow driven. last fewseen in the weeks, a strong rebound in the alsodollar and you have seeing a big selloff in the

emerging-market. thear as argentina goes, next step will probably be for some fiscal austerity. a lot of people i speak to are still positive on emerging markets. what do you see that they do not? we are positive. aret of those countries working on their structural imbalances. tactically, in the coming weeks and months, we are more negative because we see a rebound in the u.s. dollar and a lot of uncertainty around trade for an geopolitical tension. and also the rise in the oil price. that is not promising for emerging markets in the short term. he really interesting conversation in the emerging-market story. the argentinian story developing as we speak. thank you, lillian. let us focus back on the banks.

this is hsbc. a few more lines coming through from them. asy recognized $897 million potential for the u.s. settlement. they are talking about the uncertainty of the timing around any settlements and the u.s. they are saying this morning talks.e hsbc -- doj talks developed in the first quarter over several claims. we will leave that story there for the moment but you can see weakness in the hong kong session has been the reaction so far from investors. all of the charts that you see here. you can catch up with the associated key analysis. nejra: bring up your charts in your morning meeting and you can

even tweak them. brexit discussions. could the transition period be extended? and later, bill dudley joins an exclusive one-on-one exit interview as he prepares to leave the largest and most influential federal reserve bank. we will bring that to you at 5:30 p.m. london time. this is bloomberg. ♪

♪ nejra: good morning, everyone. 6:49 in london. in new york. the futures are flat. we are closed in japan. lackluster performance coming in from the asian sector. we are waiting for the jobs data out of the u.s. let us get a bloomberg business flash. here is haidi lun.

haidi: -- seems we have a small technical glitch. we will try to get that fixed for you. are the numbers we are looking for later today. are alsoe wage gains very much in focus. let us turn to brexit and the brexit transition period which will potentially need to be extended potentially for years. the prime minister is already under pressure from both the pro brexit and pro-eu factions and her party. she the prime minister is faces a backlash that could see her ousted from power. million is still with us -- lillian is still with us. what are your pounds as we see the pound slide on the back of weaker data?

is the last bank to expect a june hike. what are your expectations? >> the economy has been impacted quite a bit from brexit and it continues to be impacted. and pmi haspoor gdp been very disappointing both for services and manufacturing. it looks like we are going nowhere as far as brexit negotiations and it is starting to really impact the u.k. economy and that has repercussions on the yield market. unless you get a recovery in growth, that will not happen. in the short-term, it is negative and it probably puts a cap on where yields can go. --ra: if we get a transition if we get an extension for the

transition period will that be negative or positive? isthe transition period priced in and that will not move the markets. when you look at what is going on at the moment, now when we are getting the real questions like what will the relationship --h the europe look like what will the relationship with europe look like in 10 years? continuity.ack of typically, when you do not know what the public wants, you can ask them with an election. that did not go so well for theresa may the last time she asked them. if that were to be the course of action that transpires here, so to the polls and have another election, how with that be received by u.k. assets?

>> you have to really look at who might be able to win. if you were to have an election today, you probably would have either a small majority for labor or maybe a hung parliament again. i do not think at the moment it would change things a lot. moreything, you would be likely to have a softer brexit and that could be favorable to the market but given the uncertainty around that, i do not think it would be a strong catalyst either. nejra: let me show you a chart off the bank -- off the back of sterling weakness. the percentage of stocks above day movingdred average has risen so there is brett in this index. does this give you conviction? that is one of the reasons why we went overweight. the u.k. economy is struggling

and is not likely to recover soon but if you look at u.k. assets and the ftse 100, the assets generated in foreign currencies. and you also have a great exposure to commodities and a stronger u.s. dollar. that is part of the reason why we went to overweight in march and that has paid quite well so far. i think some of this is expressed in the ftse 100. anna: let us talk about the eurozone story. we have eurozone inflation. arounduded a blip easter. you might expect the central bank to look through this. it seems they want to take some time to understand where the weakness in the data is coming from. what do you make of weaker data from the eurozone? >> it is not surprising that

there is some caution from the ecb. there is a big drop in economic momentum impacting the eurozone at the moment. you can see that in the inflation numbers. .7 core inflation is at which is very low and very far from the target. i think they will because shifts, they have to be cautious. they will not hike soon. ratesyou get deposit firmly positive, they will not recover and investors will continue to focus on the downside. anna: thank you so much. n will stay with us. let us check the market as we go toward the top of the hour. more earnings coming from u.k. corporate spirit. lackluster on the dollar index. the bloomberg dollar index has it down a bit.

we are waiting. we are in limbo waiting for the nonfarm payroll number. nejra: and in the equity space, the japan equity market is close. 500 did close down yesterday. the s&p 500 has dropped below the 200 moving day average. a key technical. anna: suggesting we will be weaker at the start of the trading day. the nasdaq futures suggesting lower. earnings host of tech out later this week. the european data reporting disappointment. nejra: we will get more from your great interview from -- with the hsbc cfo. they brought more disappointment than the u.s. that stocks holding up perhaps. we do not have the futures market open yet.

we will talk allocation and earnings. this is bloomberg. ♪

♪ good morning from bloomberg's european headquarters in london. i'm nejra cehic. anna: i am anna edwards. this is daybreak: europe. hsbc buyback, up to $2 billion of its own shares as profit meets estimates. we speak to the cfo. return to shareholders $2 billion worth of buybacks in addition to tencent's dividend we announced. that bears out the strength we are seeing in organic growth in a number of our markets. nejra: socgen trading disappoints. the bank missed out on the

trading gains that boosted earnings at u.s. and european rivals. we break down the numbers with the deputy cfo -- ceo kerry -- ceo. we feel finally the balance will be found. to me, the major risk is more on operational risk in the cyber issue. nejra: jobs day usa they expect growth to rebound in april. the dollar slips slightly ahead of today's report. ♪ nejra: good morning, friday morning carried 7:00 in london. about breaking news this hour, numbers from iag,

adjusted operating profit 200 80 million euros, above the estimate of 194. revenue, 5.0 2 billion, a little below estimate but the operating profit number looks to be ahead of the estimate. they talk about 2018 operating upfit, revenue per cyclical 11%. the big picture, the strategy piece around aig is what their intentions are toward norwegian. we want to get some commentary on that. talked about that being a focus of today, but maybe we won't hear too much about it in terms of the conference call later. they acquired 4.6% stake in norwegian. what is their intent for that business? this business and others in the sector helped by the chinese easter, as well. what do they say about dollar

weekend, which -- weakness, which was the trend through the first quarter of this year. quarter adjusted profit comes in ahead of estimates. let's mix that into what else we know about european markets. nejra: let's look at how they will open up, because we saw a bit of a week weighing session in the u.s. and in asia overnight. like we could see a rebound when european equity markets open in under an hour. ftse 100 futures up .5%, cac futures up, as well. we will see how pnb para foul leads to that.s it looks like europe could end on a positive note in the equity markets. anna: that won't be the handover from the asia session. they are out for children's day in japan. don't have where we a full complement of markets in

the asian session. the dollar index, a little sluggish this morning. nothing extreme here, but pretty flat. of the u.s.ber out yesterday, what clues will we were ato whether markets one-off flow or there is a negative trend? what will the negative story tell us about? we will look into the specifics by industry. we are putting the dollar against the argentinian peso. of dollara lot borrowing and a focus on a strengthening dollar, higher treasury yield, taking more than the edge off of these currencies. the argentine peso dropping, the central bank having to affect rates twice. nejra: let's take a look at the futures here. we didn't have any cash trading in treasuries with japan closed overnight. if we look at the u.s. bond future, pretty unchanged. the yield is trading at 2.95%

right now. we are starting to move further away from the 3%, but will see if the treasury market send the dollar get any direction from the jobs report. looking at the european bond space where the cash markets are futures,ight now, bund o.a.t. futures pretty unchanged. not getting a lot of direction from the bond markets, but the 10 year treasury yield trading at 2.95 percent carried let's get the first word news with haidi lun. u.s. treasury secretary has said the delegation from washington is having a very good conversation with their chinese counterparts. the second day of negotiations over the trading relationship gets underway in beijing. also saiduse official the atmosphere was fairly positive, but the real test will be china's ability to deliver on its promises of economic change. north korea has reportedly agreed in principle to accept

international atomic agency inspections of its nuclear facilities. according to south korea's newspaper, citing sources, that is the aim of complete denuclearization i 2020. in the u.s., allegations that the global markets widely used benchmark is being manipulated has drawn the attention of regulators. watchdogs have opened investigations into the gauge of volatility. of --ay one is the price calculations of vix futures. brexitu k, the transition period rule needs to be extended for years because any new customs regime will not be ready in time. that is according to senior british officials.

two people familiar with the be a say in what would politically explosive decision, u.k. will have to stay inside the customs union beyond the transition period and they -- and date of 2020 while new decisions are developed. to ensure iting won't be damaged by potential escalation of trade tensions between the eu and the u.s. ae country also wants to make brexit deal around the flow of gas to the u.k. market to continue. the minister of foreign affairs spoke to bloomberg in oslo. we are in close contact to make not part of are eventual protectionist measures to protect the eu market against an overflow of steel and aluminum redirected from the american market. haidi: global news 24 hours a day, on air and tic toc on

twitter, powered by more than 2700 journalists and analysts in more than 120 countries. you can get more of the top stories on the bloomberg at top . in the meantime, let's take a look at what is going on with asia's market. we are getting toward the end of the trading week. it has been lackluster. more hours left, not that i guess it would matter at this point. across markets right now, fairly uninspired. we are in track for a third straight week of decline in asia. markets in the asian pacific equities. japan has been shut and that is not helping. across the past three weeks, the magnitude, though not very steep, it also shows how sentiment remains weak. when you look at these levels across the asian pacific, we are three months from really retesting the highs. a note on the rba, it was out with a statement midmorning in slightly good news

because it bumped up its core inflation forecast for 2018 to 2%. unemployment is 5.5%, leaving growth and headline inflation unchanged for the rest of the year. a quick check across the stocks we are following in the asia-pacific. hsbc, on the earnings front, down 3.3%. as fardown around 1.80 as the hong kong listing is 190. as far as the drag is concerned from hsbc, that is about one fourth of the points decline on the hang seng index. an health care, another uninspired trading day in hong kong. a lot of retail investors trying to get that. today,, resumed trade that is a simple case of retail investors taking profits

according to analysts we spoke to. that is the picture across the as we wrap up an uninspired trading week. anna: there has been a lot of holiday action in the asian markets. david and heidi both joining us from hong kong. results from two of europe's largest banks this morning paint an interesting picture. beats estimates, but societe generale lacked. -- compared to 80% of s&p 500 companies, which have surprised on the upside. where should investors put their money? at --lti-asset strategist is still with us. let me take you through this chart, 911 nine, which shows s&p revisions. we keep talking about this bumper earnings season, that yet there is a lackluster reaction in equities.

why? you are talking about happened early this year and it was the one off impact from the tax cut. if you are looking at europe, you are seeing slightly lower numbers, but it hasn't been as negative as the previous year. the lack of reaction is one thing that is slightly .oncerning especially the price reaction of companies beating estimates in the earnings season. that is one key point that is concerning. a pointwas reading about goldman sachs yesterday that was talking about three reasons not to worry as much as investors are about the equity markets right now. they have confidence in the global growth story and are saying monetary policy is rising, but not too fast. they also said the technical headwinds that stock markets are rallying are going to ease. in terms of the global equities story, how confident are you? >> we remain confident equities

will deliver better than bonds the next 12 months, but we are cognizant we will see more volatility. you have a lot of headwinds going into the summer. you have a lot of geopolitical for european stocks, it is slightly different. they could benefit from the drop in the euro. there is a big relationship here, like the sterling for the ftse 100. we are slightly more positive on european stocks in spite of not as good earnings as the u.s. s&p 500 on this chart, you can see it dropped below its 200 day moving average. the same for the dow are the first time in two years. should we just exercise patience because historically, it has

taken 200 days from the s&p 500 to recover? patient.e have to be there is a lot of uncertainty telling on both on the geopolitical front, but also on the monetary policy front and growth front. investors are struggling to assess what is going to be the next move. slowdown in growth or rise in inflation with higher yield? that is what is reflected in this chart. investors are struggling a little with what the next move will be. anna: let's talk about the banking sector. here thoughts as we sit here having received earnings up its from a number of corporate, french banks disappointing in the revenues they have generated. hsbc saying they're happy with butal blinking -- banking, as a whole, given the volatility we saw in the first quarter, where do you stand on the banking sector? lilian: the banking sector was one of the most conservative calls this year.

every analyst was a list on the sector because of rising rates. this hasn't played out much and one other reason -- they are very much looked on the downside. it has been a credit story. anna: great to you with us this friday morning. lilian chovin, multi-asset strategist at currents with us. off to an unhealthy start, isn't aor ping an strong debut.

the latest from the hong kong stock exchange is next. deputy ceo says having his job is like drinking from a fire hose. we hear from the cfo next. ♪

♪ good morning, bloomberg daybreak: europe. 7:18 in london. what will the trading day shape up to be? for theave to wait afternoon. we have the jobs number early afternoon. euro stoxx 50 trading possible -- positively. a lackluster session in asia. downward.s point here is haidi lun. out onsocgen has missed

the trading gains that boosted earnings at european rivals in the quarter. a restructure after the surprise exit of the investment banking head. the french bank posted lower-than-expected results. has been charged with taking over the investment banking responsibility. he was one of four deputy ceo's named in a management or suffer -- reshuffle. -- diversity as you can see from experience, from age. the new team is a good asset for the group. that is your bloomberg business flash. lun in hong kong. hsbc shares are down in the region. after the first quarter earnings. the ceo john flint commented

that his role was like drinking water from a fire hose. just afterh the cfo the results were released. he talked a lot about the share buyback. >> i think the buyback we are announcing this morning is in line with what we have done in the last couple of years. the look from our capital management perspective, the numbers bear out that the growth environment across some of our home markets, we have good revenue across regional wealth management, commercial banking and it has always been putting our capital to work and supporting the organic growth of the firm. what we do this quarter is sit on a tier one ratio 14.5% and have delivered organic growth across the firm and equally see

the opportunity to return to the shareholders $2 billion worth of buybacks in addition to tencent's dividend to be announced today. that bears out the balance sheet strength of hsbc and the strength we are seeing in terms of organic growth coming through a number of markets. you talk in the statement today about positive growth opportunities and spending the money there in -- instead of returning more. what are those opportunities you envision spending the money on? is focused organic growth, and we have seen that coming through in 2017 and again in the first quarter of 2018. we have seen really good growth coming through the retail bank wealth management business, that has informed in hong kong as well as within the united kingdom. are markets, which proceeding well from our perspective. aso, good progress from commercial banking standpoint, informed by strength in the asian markets and the united

kingdom. and in good -- difficult trading conditions, and our markets did well. it is about organic growth in our home markets of hong kong and the united kingdom, and across the wider network. it is that we are talking about in terms of supporting the activity with our customers they and day out across the network. we wait for the strategy update to come later on in the year. how far along that process are you? what update will we get alongside the second quarter earnings on strategy? iain: there is great engagement with john and the management team and the board of directors. we are working through that process and expect to do an update for investors either at or shortly before the half-year results. we will get good guidance as to how we continue to refine the work we have been doing the last two years and the steps forward from here. anna: that was hsbc's cfo

speaking to an earlier. n has fluctuated on its trading debut in hong kong. shares dropped as much as 7% before paring those gains. good doctor -- in the biggest ipo this year, though the mark be -- maybe eclipsed. joining us, bloomberg's stephen engle's. tell us more about the valuation of good doctor. tephen: maybe they priced at the low to high given the macro situation and the volatility in global markets and maybe the trade friction coming out of china with the u.s. delegation there, perhaps because hong kong is always -- also raising rates with the fed. this is the worst for -- for port -- performance for a tech ipo in three years. traders we spoke to said this is a disappointment and probably a big reason is it -- it is a drag on the hang seng as

it goes down toward the 30,000 strike -- 30,000 threshold. it is the number two biggest volume over in the hong kong market today. performer, upod about .3%. the gray market yesterday showed a big pop upwards, but maybe those outside concerns are weighing on it and perhaps they priced it too high at the top-end of the indicative range going in. anna: it raises questions about what this means for the sector. in hong kong for the world's biggest ipo since 2014, how does good doctor set the stage? this could be just a temporary [bleep], because charles lee is the ceo of the hong kong exchange. i spoke to him after the listing he seemstoday and optimistic about the incoming pipeline that is shaping up,

especially after monday. the new rules were in place that allowed dual share structure and waited -- weighted stru cture, where they can control the company. that is a can -- controversial change that took effect monday in hong kong to allow these big tech titans from china to come here and list. hong kong lost out on alibaba because hong kong did not allow that in 2014, so charles lee thinks there is a big pipeline lining up to come list in hong kong. you. stephen, thank he's joining us from the hong kong exchange. a big week for the banking sector. a big day today, we have had a fascinating set of reports. hsbc returning to billion dollars to shareholders, but making you aware that is where it stops. positive picture of

that. they say it is because of the organic growth opportunities they want to invest in combined with developments in the cost, meaning shares are trading down in hong kong. nejra: we will see what happens when london opens. we are looking at socgen and bnp paribas. we saw a down day in the stoxx 600 yesterday, the s&p 500 dropped below its 200 day moving average. it looks like we could end the week on a positive note. euro stoxx 50 futures up. movesl see how the cac 40 on the banking story. happening in the bond markets, the 10-year bund yield unchanged. we are looking at treasuries. 2.95% is where we are now. anna: things look positive in europe for now, but we have the jobs data in the middle of the trading day. head toward as we that key jobs data.

that is it for daybreak, europe. this is bloomberg. -- "bloomberg markets: the european open" is next. this is bloomberg. ♪ we use our phones and computers

the same way these days. so why do we pay to have a phone connected when we're already paying for internet? shouldn't it all just be one thing? that's why xfinity mobile comes with your internet. you can get up to 5 lines of talk and text included at no extra cost. so all you pay for is data. choose by the gig or unlimited. and see how you could save $400 or more a year. xfinity mobile. it's a new kind of network designed to save you money. click, call, or visit an xfinity store today. retail. under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store

near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. ♪ guy: good morning, welcome toguy: "bloomberg markets: the european open." we are live from london. i am guy johnson alongside matt miller in berlin. the dollar remains under pressure ahead of the monthly u.s. jobs report. europe's futures are called higher. the cash trade is less than 30 minutes away. in hongc's shares