nejra: good morning from new -- from the city of london, i'm nejra cehic. this is bloomberg daybreak: europe and these are today's top stories. nejra: timing is everything. the feds dovish pitted could recession past 2020. jay powell is coming around to a wait-and-see view. are pushed upets that are tweeting today the european and u.s. equity futures struggle for direction. warnings by the queue? nissan scraps plans to build a new car in the u.k. as theresa may renews efforts to find a plan b on brexit.

good morning, everyone, and "daybreak europe." let's get to the ryanair numbers. confirming its 2019 profit guidance between 1% -- 1,000,000,002 1.1 billion euros. revenue comes up to 1.5 3 billion euros. the key here is the versus arter loss profit a year ago. ryanair saying it cannot rule out further cuts to airfares and guidance. basically, ryanair reporting a 19 point 6 million euros net loss in the third quarter and is expecting weaker fares.

the passengers were offset by 6% decline in average fares due to excess winter capacity in europe. commentaryso the coming through here is that higher all prices -- higher oil prices and lower fares have created a wave of eu airline failures. also ryanair saying in a morement they expect closings and failures in 2019 due to overcapacity in the european market. the ceo ofeak to ryanair, do not miss that conversation in a few minutes. another one of the swiss banks reporting. it's going to be a tough one to explain. that's going to be the first issue.

there really will discuss with us. it's what trip them up in the last set of margins. the gross margin were critical of little bit earlier. it's down for basis points. cost ratio 7.6%. keep an eye on that. what is next? we will have the conversation aer just ceo of julius b after 7:00 a.m. risk on mode continues as we going to chinese new year. here is the very latest from hong kong. >> pretty quiet day. a holiday upon us. china close for the whole week along with korea and taiwan. pretty liquid markets today. a mixed bag when it comes to equities. once lowers the philippines and

indonesia. these markets are on the cusp of entering into a bull market. off aboutikkei is 0.5% given the weaker yen story. the big story has been an fx. dollar strength coming through in the solid jobs report on friday. pretty much stable here but dollars certainly getting a little bit of steam. here at six: -- 6.77 here again. remarkable to think that a couple days ago or sub 6.7. most asian effects selling off your today. you mentioned about the role commission but also that building approval data that has disappointed as well. we are continuing to see the rally. some say the demand picture is still looking pretty dismal. looking at movers as well.

sony, the earnings were amiss. cited weak demand when it came to the playstation 4. honda as well was a miss. insurer, they discovered ok from regulators for two new licenses to expand in china. that stock should react positively to that news. of 3.6% in hong kong. education group up five and a half percent. more investment in the higher education in china. back to you guys. they give a today we are can thehe question, euro stocks index sustain a reality -- a rally without a recovery in the regions banks? you can reach out to us at the team. let's get the bloomberg first word news in hong kong.

>> thanks. the u.k. business secretary has urged theresa may to rule out a new deal brexit. as a going to the financial times. the comments come as the sun build out its part in sunderland. this is the u.k. splits from the eu. ministers are now considering withdrawing a 60 billion pound support package for the japanese carmaker. trump isade and donald considering a meeting in vietnam at the end of the month. they are reporting that the u.s. and chinese presence look at holding a meeting on february 27 and 28th. president donald trump is standing by his plans to reduce the u.s. military for point -- footprint in the middle east but says he intends to maintain a presence in iraq.

he says he will ignore the fisa the intelligence community what comes the country. locations in many the middle east in huge difficulty. every single one of them was caused by the number one terrorist nation the world which is iran. my intelligence people tell me how wonderful iran is, if you don't mind, i will just go by my gut. the patriots beat the rams 13-32 when the lowest type that's low-scoring super bowl ever. his lead has extended for the most super bowl victories to six. and i called out competitors for the use of corn syrup. industry group tweeted that corn growers are disappointed in the company. they say they fully support the industry and will continue to invent -- invest in it.

global news 20 grams a day on air and at tictoc on twitter. powder more than 2700 journalists and analysts in more than 21 cut -- in many countries. jpmorgan says the feds change in tone may mean that investors should reconsider the timing of the investment cycle and should be driven by fears of recession for now. the fed signal that it's done raising rates for a while. they said yesterday the jay powell is coming around to the view that policymakers should wait until wages and inflation rise before hiking rates again. joining us now is dominic armstrong. with us.have you we are trying to time the cycle. let me start with the big question. where are we? transitionse great in january has been wave after wave of blood on the screens through much and certainly the last quarter of 2018.

the bad news has evaporated. the came out last year looking at form arises. now the moves are pessimistic. perhaps one more and even that is being question. therefore the strength of the dollar which battered emerging markets are we see most of the pain, has gone. we are waiting for the bad news to stop in order for the extraordinary potential the comes emerging markets to start been realized. thus were already starting to see in january. manus: good morning, it's manus in dubai. stocks have price this reprieve but there's more to come. in terms of emerging markets, forget that. that's the wrong chart. is there more to go? is there more to go in high yields?

if you look at where the veteran came last year, very much so. an extraordinary bound spread open dramatically. frankly, ultimately, what becomes a fair return for the sort of risks you are taking. a lot of countries were written off. asia, africa, latin america. producing an astonishing almost once in a decade opportunity to pick up very attractive and come -- income from positions which typically might have yielded less. a lot of catching up to be done. we've seen in the last set of earnings of the stronger dollar, whether 20 federer not in 2019, indented results at pfizer, j&j, and mcdonald's area there are two sides to the dollar store we

look at small caps. u.s. credit, how much does the strength of the daughter -- dollar factor into where you would be a look to take these opportunities? >> attic a lot of that is based on sentiment. of the strong dollar. there are concerns of people a dollar fromrate a telecom player in latin america or a cash starved sovereign nation in africa. where they going to generate the dollars? and so actually, there's a general perception that the strong dollar is going to be bad for emerging markets. you have ans, abundance of companies that generate dollars in their day-to-day operations. that's your first base and that's a really interesting place to start. terrific companies. turkey, india, bits of africa, generating very interesting dollar incomes that have been ignored by a breaking down of

that perception. a good place to start. you've given us in a la carte menu their of countries. of the biggest drivers which is debate as to whether the u.s. could be on the cusp of a recession? tweeting furiously last week. beorgan saint 2020 may not the time to worry about recession because the size and the gravity of the vivid we've heard from the fed. >> i think it's always very helpful at this phase in the cycle to look for the next whatever it will be. having the strength of the dollar running there, the next phase of the next thing to look at be on the horizon, if it's one of those joys things you can go on predicting because one day you will be right. i think there is so much momentum and evil lucian in the quality of world markets that it

holds to a certain extent the u.s. now in a much more solid embrace. i think this could be some way off. we are looking beyond the year. looking for many opportunities that we will talk about more throughout the hour. dominic armstrong staying with us. europe's biggest low-cost airline reports a tax loss. firsto gives us his interview of the day. that's next. you can tune into bloomberg radio. we are with you every step of the way. we are dab digital radio. this is the berg. -- this is bloomberg. ♪

nejra: this is bloomberg "d

aybreak europe." manus: good morning. nejra: good morning, manus. we see dollar strength for three days. you're seeing some yen weekend. meanwhile, lovitz off turned of uti. 55 of 17. if you look at equities, sapping four days of gains. strong month for the em. we are told to be careful. manus: yes, let's get into these markets. the nasdaq up. coming off six straight weeks of gains. longest run since november 2017. what is google going to say? of the uniontate going to give us? is it freezing in the dollar? it's a tick are too high this

morning. stocks are lighter on their feet. it's going to be tough for the ecb to normalize this year. a tough old time. --us: today we're asking nejra: today we are asking if the euro stocks index and -- can sustain a rally without a recovery in the region's banks. you can join the debate. reach out to us and the mliv team. let's get the business flash. here's anabel in hong kong. sony is the latest big tech company to suffer from the slowing local economy. it sucked the most in 3.5 years on weak demand for the playstation 4 and a lower for your revenue forecast. fellting income in games 14% to about $660 million for the holiday. sold just over 8

million consoles compared with 9 million a year earlier. in bev is set to have picked jpmorgan and morgan stanley for initial public offering of its asian operations. it could be one of the regions biggest share sales this year. they are said to be considering hong kong as a venue. but a final decision has been made. the ipo could raise more than 5 billion u.s. dollars. bloomberg data shows only three asian shares tops that last year. is lobbying china for changes that will make it --ier to shorten it would restrict lending of shares listed in china, for shortselling. morgan stanley is also pushing for the changes. of stresssaxes head that is said to be leaving. he is leaving the firm in ongoing churn.

his expected to the part in the coming weeks. it suffered by more than a decade of morgan stanley. a spokesperson declined to comment. that's your business flash. thank you so much. ryanair has reported a fourth-quarter after-tax loss of 19.4 6 million euros. down for a profit of more than 100 million euros a year ago. they cannot rule out further cuts to guidance. this as they face a slump in fares and ongoing brexit uncertainty. ofning us is the cfo ryanair. joiningu so much for us. we heard the news there. we heard about the loss. you talk about price competition in the statement as well. how are you actually going to respond to this? can you cut some roots and basis? we are to growing very

strongly. we increased capacity for target a couple of weeks ago. we are going to do a we always do. lower fares, lower costs, and grab market share. that's exactly what we're doing at the moment. never been a better time for our customers. this huge amount of overcapacity in europe at the moment. some of the capacity comes out and has been helped by lower fuel. fuel has dropped from $80 a barrel to $60 a barrel. we are going to see fares under pressure and will continue to do what we do area build market share. nejra: you say you continue to see fares under pressure and capacity comes out. with a price competition depressor margins? we don't have a huge a lot of visibility to the summer. some of our competitors have been a little bit more list then ourselves.

we have 17% of our bookings in place for the six months april to september. the trend at the moment and i have to say, we don't have a huge amount of visibility, but the trend is on the way down rather than the way up. we see fares down approximately 1% from the same time last year. we don't know what close and bookings will be like. we don't know until we get closer into the summer. rising fuel significantly are some weaker competitors going out of business, i think overcapacity is good to keep fares suppressed for the next couple of months. manus: good morning to you, good to have you with us. not equals almost a legacy carrier. tell me what you are silly growth story? it had scheduling issues, tumbling fares. you are going to be a reinvigorated growth stock.

neil: i give each other 10 reasons. -- i can give you 210 reasons. our game changer aircraft delivering in april. 210 of them on order. that will see us grow from 142 million customers this year to 200 million customers by march 2024. our latest acquisition and austria can carry 4 million customers this year and will increase to 6 million next year and 7.5 million the year after that. we have a lot of reasons why we are a growth story. excess of 20% market share of next five years. 210 good reasons. -- nejra: howh of much of the growth will come from expanding through acquisitions? the vast majority of our growth as has been the case in the past will be organic. when we see opportunities to do

something that helps a skin to markets that we might not get into as quickly, for example vienna. give us opportunities to fly airbus aircraft. that's quite interesting. fairyned up a number of important slots in the german market where we are growing strongly. if we see opportunity like that, we will look at them. i don't see as being a big m&a but imn day -- see consolidations having of the next five years. i think removing to a situation similar to the u.s.. i think europe is a little slower getting there we are moving in that direction. lots of disgust -- discussion around brexit. licenses for three

of your u.k. possibilities are getting your house in order. if there was a hard brexit a marsh twinighter, what plan? one of the key issues is whether flights will actually fly. that appears to be in resolve at this point in time. as regards to securing the u.k. operations, we in december air operator certificate that secures domestic flights here in the u.k.. to flyd also enable us to countries outside the u.k. the likes of morocco in jordan and elsewhere. opportunity where all the eu airlines have the majority owned by eu nationals. we have a strategy which will enable us to retain that in the event of a hard brexit. but that will involve is that are not eu shareholders of which the u.k. will be part of that

will not have voting rights for a. of time and he will be forced to sell to eu nationals. nejra: are you thinking about making an approach for no region eric? -- for norwegian air? neil: i can't speculate -- i can't comment on speculation that we don't catch falling knives. thanks for joining us. come back again. we talk central banks. how they have reacted to the feds dovish turn. ems it's have driven -- risen too far too fast. manus: tune in to bloomberg radio live on your bloomberg device -- mobile device or dab digital. i will be joining you. not today but every other day.

new york looking gorgeous. this is bloomberg.

comcast business built the nation's largest gig-speed network. then went beyond. beyond chasing down network problems. to knowing when and where there's an issue. beyond network complexity. to a zero-touch, one-box world. optimizing performance and budget. beyond having questions. to getting answers. "activecore, how's my network?" "all sites are green." all of which helps you do more than your customers thought possible. comcast business. beyond fast. and the army taught me a lot about commitment. which i apply to my life and my work. at comcast we're commited to delivering the best experience possible, by being on time everytime. and if we are ever late, we'll give you a automatic twenty dollar credit.

my name is antonio and i'm a technician at comcast. we're working to make things simple, easy and awesome. manus: this is bloomberg. i manus cranny in the by. nejra: i'm they were chained hitch in our european headquarters in london. we are not getting a lot of direction from asian equities today but trade very much in focus. absolutely. i think larry kudlow talking about good vibes. excess we are down to, good vibes come i love the story this morning. they are talking about robert lighthizer having very clear ideas. if you do a deal and break the rules, we don't to the trade deal. -- do the trade deal.

nejra: we are looking forward to union speech by president trump. he could focus on china, nafta, that could move apparel and auto-parts shares. suggesting that jobs data will say the economy is strong the patient is warranted. it all comes down to currency volatility. yuan has lost 1% in value this month. i want you to wave goodbye to the dog. it's hard to do. dog, the 12th the and last animal in the zodiac cycle is approaching. here is what the analysts are expecting for the year of the pig. new year let down. that's the stark warning from

bloomberg intelligence when it comes to china's annual travel rush. passenger traffic growth is likely to fall short of 2018 with beijing's push to stimulate consumption unlikely to benefit airlines in time. that china's social credit system. any wrongdoers be barred from planes and trains. more than 400 million rail transports take place with 10 new tracks being put to the test. seeing 7 million are trotting off the board. domestic and short route destinations will be top pick but cyprus and south africa are that havee countries lax visa requirements for those venturing further afield. when it comes to digital red packets, the competition among tech giants remains fierce. an $80 million -- $280

million in users online wallets. want to bring more bacon home for the markets? think again. investors should focus on limiting losses in the year of the pig. that could weigh on high-end brands. saysberg intelligence luxury retailers in asia are unlikely to replicate last year's sales gangs -- gains. for less extensive option, perhaps trey flowers. areopping 10 million ponds going on sale in beijing's market me this new year may just come up roses, literally. nejra: what a car for way to check in on the world. let's turn to our partner in

mumbai. let's start with you. a number of asian markets closed today but not india. it was a big week for indian assets. to decision this week. how does it look today. >> good morning to you. the color for the market today is read. i want to tell you that. off half a percent here .5% lower. that's the key benchmarks. as you can see on your screen, most banks have recovered a little bit of lost ground and i go to missindex will it with the other part of your question which is decision on the sixth of february. that's the big one will be watching out for. will take offn pressure. the currency has lost quite a

bit of ground in today's session. i don't know if investors perceived that the budget doesn't quite add up. there's a bit of pressure across the board's. they are being particular as you can see on your screen. it's been the highlight in the move today. we'll keep you updated. back to you area -- back to you. manus: everyone just hold the lights. we have a headline. this is reaffirming the determination. purchasedetermined to the other company. they reaffirm their commitment to buy the oslo force. towas an all-cash offer acquire the outstanding stock.

they are determined. how determined are you? what's going on in your world in terms of the markets? start with asia-pacific. geeking out some gains is morning likely due to some better-than-expected data. also jobs report. have to remember so much that makes up its aggregate index, a lot of these companies are closed because of the year of the pig. sony closing down 8%. 2016. since they are selling let's play stations, weaker profit also cut into guidance for revenue for the rest of the year. brent hovering around $62 .7 four cents area -- 62.74. venezuela, alln of that easing concerns of a glut. i want to look at commodities and she was going on in gold. been one asset that has

been off the radar for many investors and it's climbing as much as 14% since its august lows. etf'ss one of a number of that backs the elements. thing to be cautious about, we're going into a period of potential weaker demand of gold as to its biggest buyers come off the market. we could get some exaggerated drops. a lot of people very bullish but one reason for some caution. thanks so much. today, we are asking the question on mliv. we've gone around the world with the market. can the index sustain a reality without the recovery? reach out to us. let's get the first word news. the u.k. business secretary has urged theresa may

to rule out a note due brexit. that's according to the financial times. greg clark's comments, as nissan said it would build an suv at but isnt in sunderland worried about uncertainty on the -- on the split from the eu. the government is now considering withdrawing a support package. and xi arep considering a meeting at into the month. the presence are looking at holding a meeting. best the symmetry the seventh and 28. president donald trump is standing by his plan to reduce the u.s. military footprint in the middle east but says he intends to maintain his presence in iraq to keep tabs on iran. he says he will ignore the advice of the intelligence community when it comes to that country. controversy in virginia. the governor says he won't

resign over a racist yearbook photo. democrats are called on the governor to step down following a national outcry of photos from a medical school yearbook. , quote,the photos are clearly racist and offensive but denies that the people shown in blackface or a kkk robe are him. the governor is weighing his options with senior staff. theports, the patriots beat rams, 13-3, to when the lowest scoring super bowl ever. tom brady has extended his record for the most super bowl wins 26. he is now the most decorated player in history. but the super bowl wasn't all fun and games, bud light caused controversy with the u.s. corn lobby as its ad pulled out to -- called out competitors for the use of corn syrup. says it fully supports the industry and will continue to invest in it. global news 24 hours a day on air and at tictoc on twitter.

this is bloomberg. think of are a much. let's get you up to speed. let's set your weekly agenda. it's the year of the pig. markets are closed all week for the lunar new year. a bit incorrect to call a chinese new year. earnings season kicks in monday. i'll results are expected after the bell. nejra: on tuesday in the u.s. we have the state of the union speech from president trump. special coverage will start in the early hours of wednesday morning london time. what kind of stock tips much you pick up? gm halted its outlook for 2019. and finally on thursday, we of the bank of england's rate decision and inflation report. that is your week ahead. now let's turn to emerging markets. stocks soaring the most since

march 2016 with him currencies posting the biggest gain of the year. a more dovish fed and a more positive move around u.s./china trade talks. tensions remain in venezuela as nicolas maduro resists u.s. and european pressure to hold new elections. dominic is still with us. you are 90% invested in emerging markets. a perfect person to talk to about this. you also do geopolitically driven investing. what is the market mispricing the most of the moment? -- where would you take opportunities? neil: after that year -- dominic: great to see the year beginning to adjust. you're looking at areas where stillspricing is available to exploit. i would say african sovereign debt you have phenomenal

intellectual capital being invested in africa and turn into real capital, some great re-rating opportunities. latin america consumers, asian consumers, still a long way behind in picking up. perspective, we think u.k. banks right now are basis that wee had views on brexit. but consumers across europe are largely being toyed with. ultimately, it is the responsibility of leaders to deliver something that works and we believe that is ultimately where will calm. it's getting incredibly old the right now but ultimately we will get some kind of a deal. u.k. position been strongly written down to check the worst-case scenario. i think we're looking for quite a strong return. let's dig a little bit

deeper into that. do you want to have domestic facing british financial institutions or global facing financial institutions? barclays the global side. maybe something more along the rdf, etc., on the domestic side. how do you want to play it? very much the international facing. they been strongly marked down in sentiment terms in the face of the new hard brexit scenario. interesting thing is you get your sterling exposure but while sticking up for u.k. banking's, with 6.5% yield, a very well run and large international company that has been hugely underperforming as a result of the sentiment. therefore you're picking up the

full international spectrum of potential earnings while the same time picking up on the hopes of the sterling reevaluation while picking up a strong income yield of the same time. we think it's the credit side bonds that will give the very best of those returns as we get to this ugly next six weeks. how crucial to your investment thinking on the u.k. is what the bank of england doesn't the next six months? does over the next six months? dominic: it's played its cards and such a way that on the side of there is other institutions, it's it abundantly clear which side of the debate it's it's on debate been part of -- it sits on an is in part of a strong negative sounding. the voice of caution, or the voice of reason. it's going to have to be an evolution. the bank of england to a certain extent has been slightly discounted because of the strong

political stances made. i think people are looking beyond that, to be honest. dominic armstrong stays with us. blow to the u.k. as it scraps plans to build a new model in the country. is it too late to stop them from ditching the u.k.? on yourg radio live mobile device or on dab digital radio in the london area. this is bloomberg. ♪

nejra: this is bloomberg. i'm nejra cehic in london. i'm manus cranny in our

dubai studio. let's get our first word news. desley: sony is the latest in tech company to suffer from a slowing global economy. slumped the most in three and a half years on weak demand for playstation 4. dropped 14% toe about $660 million for the holiday. the company sold just over 8 million consoles compared with 9 million a year earlier. ab inbev is said to have picked jpmorgan and morgan stanley for an initial public offering of its asian operations. it could be one of the regions share sales. the world's largest brewer said to be considering hong kong as a venue. a final decision has not been made. the ipo would raise more than 5 million u.s. dollars. only three asian share sales top that last year.

manus: that's your news. -- that is your news. manus: thank you very much. some pretty serious news over the weekend. nissan scrapping plans to make its suv at the uk's biggest auto factory. it cited ongoing uncertainty about the u.k. split from the eu. the times reported that ministers are considering withdrawing a support package from the carmaker. editor.is the brexit how big a blows this to theresa may? can we really attribute all this to brexit? brexit doesn't help them. the reason this is been such a blow is because it was based in sunderland, the city that voted for brexit even though it had quite a lot to lose. theresa may offer the company

secret incentives in a letter that had never been published to can -- to encourage the coming to continue investing. institutions suggest that those pledges are no longer considered good enough. a blow. it's a blow just 53 days ago. it also reflects just a broader unease in the business community. there is still no deal. the news this morning is that may is convening a working group with that working group is looking at is basically recycling old ideas to make the brexit deal work. thea: as we edge closer to four state, what are these options now? has treated which he calls alternative amendments that ranges to the irish border.

and she is targeted her attorney general with looking for an exit the most toxic and bulimic part of her deal. noteu has said these are acceptable. we expected to come back from brussels this week or next week. she has to come back to parliament in there will be a series of votes in parliament. that's the next milestone. he will see if there's a deal that can get through parliament. nejra: thanks so much. bloomberg's brexit editor, thank you for joining us. for activeing sign investing. investors are pulling cash from passive funds. this 2019 the year of the stock ticker? here is dani burger.

>> it might be to early to call the trend for the whole year. but this is an encouraging sign. haveand european etf flows pulled nearly $6 billion in the first months of the year. we've only seen that happen to other times in the past six years. usually we see massive inflows. when it happened the past, typically stocks are falling. the past month, that starts year since 19 a seven. this is actually investors getting rid of their passive holdings and looking for opportunities in individual funds. stockpicking coming back invoke. you can see this play out in the data as well. here's a correlation in u.s. and european made indexes. concerns kicking off. this is fed concerns. as you get this dovish shift from powell and as we go into earnings season, correlation

plunges. stocks are moving less together given investors the opportunity to dive in and look for individual opportunities. let's get out of the consensus trading get on the active management trail. thank you very much. it's get back to the emerging-market conversation. data fromflation january down from a peak of 25%. where does that leave the central bank? let's get some more thoughts with dominic armstrong. get moreing to inflation data. a pivot last week in terms of tone and rhetoric which is we want more proof before we move. think that's probably right. in turkey it so interesting that we went from the crisis last summer when turkey really was joining the list of the world's really naughty boys.

and actually they have recovered very strongly. i think the reality is that repositioning in relation to the events in saudi arabia, turkey coming back to the head table of middle east strategic positioning, and i think from their, it was astonishing change in tone of the self-confidence of turkey overall. turkey now of all the countries in the world, produces some really interesting hard currency investment opportunities from that make nearly all of our washing machines under the whirlpool brand name. people would not necessarily associate that with turkey. there are hard currency early -- earnings from major turkish conglomerates. to see an opportunity in venezuela at all? we seen a rally in a number of bonds. opportunity for you are you are staying away? like iranenezuela

will be one of the great rebound stories. of the great infrastructure investment stories. now, there is still so much uncertainty about how this will unfold. until the ratio can be removed. military change their stance madero no longer has that backing, it will be a little bit soon for people to go charging and. whether that's three weeks or three months, undoubtedly there is change. something is happening though create incredible opportunities for investors. there's the potential of course for major international we'dontation and i'm sure all know where it leads ahead. manus: let's see where does emerge. thank you dominic. show, we havehe more conversations for you.

we have the ceo of julius bear. that's at 7:00 a.m. this morning. is morning.

manus: good morning, i'm manus cranny. this is bloomberg. nejra: and i'm nejra cehic. these are today's top stories. jpmorgan says the fed's dovish. could push the next recession past 2020. jay powell is coming around so wait and see. lunar new year, friday's jobs beat. pushes the asian markets in asian trading upwards and u.s. equity futures are struggling for direction. will earnings provide the clues?

europe's biggest discount airline reports a third-quarter loss and warns that brexit could see it miss its targets for the full year. in london. a.m. just under an hour from the start of cash trading. got the numbers coming through from turkey. ate inflation at 19.0 -- 19.02% in january. the noncall coming in at 20.35%. we are looking to see if a run-up in turkey costs would threaten to halt a broader

deceleration in price growth. halt to theng a four-day rally in emerging-market equities. also, of course, january was a strong month. gains of more than 8% on a dovish fed. had the jobs number on friday. that points to the strong economy and of course the wage growth, so -- perhaps supporting the view that the fed can exercise some patients in here. were not getting a lot of direction from u.s. futures or from european futures. pretty much flat across the board. manus: pragmatic might be the word. let's have another headline. it's a feast of earnings. mufg, third-quarter net income

221.4 billionn -- yen. give you a little bit of preview in terms of what they think the yen is going to be for the year. let me take you to the bond market. three-month dollar libor is at the lowest since november. bonds are drifting lower. u.s. lower, germany lower, italians in the middle. are they going to try and regressed some of the mega they love inhat the market? is it all priced in? jpmorgan would say that treasuries have fully decided the fed on pause. we dropped by 50 basis points since november. we discuss that in the next 10

minutes. yvonne in asia. quiet session here considering that it is the lunar new year holiday. china, korea, and taiwan. we are dealing with low volumes and low liquidity. the rally has stalled with the philippines and indonesia and markets. losing a bit of steam. both these markets were talking about last week on the cusp of a bull market. india's the one to watch. this hangover after the budget and they are raising their fiscal deficit target by a little bit. a lot of jitters when not only came to the equity market, the fx market as well. but the bond market certainly was surprised why this budget overall. we did ceos pick up at nine basis points. overall the fx story has been a stronger dollar.

most asia fx today is falling out of bed. weakening by 0.3%. about this rally which have one set was pretty strange. japan still had a pretty decent day with the end also weakening. -- the yen also weakening. rallyng on iron ore, that seems to be petering out. singapore futures once again falling 1.5% or more. let's talk about the earnings. sony was the big one, it sell -- it fell the most in two years as they cut their revenue forecast based on a weaker demand for playstation 4. honda was also a miss for the third quarter, adding to auto sector woes. aia, the insurer in hong kong saw boost of about 3.5%. regulators approving to new

licenses for them to expand into regions in china. that stock should react positively and we saw that here today. his education stocks in hong kong, they were flying after we heard from the state they were encouraging more foreign investment into higher education. we saw a bit across the board. thank -- back to you guys. thea: we are asking question on mliv, can the euro stocks index sustain a react -- a rally without a recovery in the region's banks? you can reach out to us. let's get the bloomberg first word news. desley: the u.k. business secretary hazards theresa may to rule out a no deal brexit. come asrk's comments they have said they won't build an suv in sunderland.

it underscores ongoing uncertainty about the split from the eu. they're considering withdrawing a 60 million pounds support package for the japanese carmaker. iping areump and xi x considering a summit of the end of the month. they are considering holding a meeting on fairbury 27th and 28th. president donald trump is standing by his plans to reduce the u.s. military footprint in the middle east. he says he intends to maintain a presence in iraq to make -- to keep tabs on iran. he us a says he will ignore the advice of the intelligence committee when it comes to the country. were in many locations in the middle east, having huge difficulty, every single one of them was caused by the number one terrorist nation in the world which is iran. when my intelligence people tell

me how wonderful iran is, if you don't mind, i'm going to go by my own counsel. venezuela ends's would defend their country in the event of a u.s. led invasion according to the president, nicolas maduro. rejected an ultimatum from european countries to hold new elections. over theows protests weekend as supporters march on the street. donald trump's his military intervention in the country remains an option. controversy in virginia, the governor says he won't resign over a racist yearbook photo. democrats have called on the government to step down following a national outcry over photos from a 1984 medical school yearbook. he says the photos are clearly racist and offensive but denies that the people shown in black face a kkk robe are him. according to the washington post, he is weighing his options with senior staff.

and in sport, the patriots beat the rams, 13-3 two and the lowest scoring super bowl ever. has extended his lead for the most super bowl wins by quarterback to six. he is now the most decorated player in history. bud light has caused controversy with the u.s. corn lobby. it's added called out competitors for the use of corn syrup. the industry group tweeted that corn growers are disappointed in the company. but the owner says it supports the industry and will continue to invest in it. local news 24 hours a day on air and at tictoc on twitter have been more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. thank you very much. we will have a conversation with baer shortly.lius the stock has indicated 4% lower. with him very shipped

-- shortly with is just a vacation on what you will do and how you will turn it around. it's is a double fault in terms of reporting. he has x for, surely, only on bloomberg. the fed'sorgan says change in tone means that investors should reconsider the timing of investment cycle. u.s. signaled it done raising rates for a little while. joins us now is our guest. in theooking ahead context of a jobs report. some are saying this validates the fed on patience and economic strength. economicoking on strength base the jobs number but also patience. what equities would you invest in? raj: i think the view is probably correct that backing away from raising rates is

deferring the onset of the onset of an extra session but i think the reasons are probably not as cheerful as investors might like to think. the backdrop to this is what had nearly a decade of these super monetaryrthodox policies that we still can't get back to normalization. is the answerthis to everything but you can see from the beginning of this year, the relief the markets have felt since the federal reserve changes tone. there is a sense of relief across most asset markets. a former fed governor with me sane it's currently hard for federal banks to normalize this year. with this pivot in mind, what does it mean for american equities. relative to europe and the others, on a defensive play, to say being overweight is a reasonable strategy?

to: it's very difficult think about the regional allocation amongst equities has been either defensive or aggressive. there are lots of defensive companies in the u.s. but also lots in europe and the far east. is, wethink it means continue to have a very low discount rate for the long-term discounting of equity cash flows. can see where you steady, visible, reliable growth, the net present value, it benefits. i don't think it's a green light for risk on because i think it's a vindication of the fact that these policies haven't worked. continues into them, we would be able to raise interest rates and normalize central balance sheets. the pivot to pause tells us these policies haven't worked. what really shows is we can't get out of them now that we are there. let's talk about what is

working for you. you said you have a series of holdings that are benefiting from some very strong trends unacceptable valuations. give me some specificity. one of our biggest overweight is the technology shelter -- sector but we like very mature, boring, how to fashion technology companies that we think will be a big beneficiary from the move to 5g, electronic vehicles, autonomous vehicles. sure demand coming through. -- structural demand coming through. these are not companies that will double over the next five years but their earnings and cash flows are underpinned by trends you can see taking place. the upside is not reflected in their valuations where's is a lot of it excitement about younger, newer business model companies. the unicorns.

we find that much harder to stomach. and hasn't worked and i get that message loud and clear. but equity markets have responded for the past 10 years. as a prices have risen, land valuations have risen, equity prices have risen. i want to talk about a slightly more protectionist mode. on histo get your view it volatility on cold, oil comments stocks? the most that has flatlining attribution to volatility. if you were to look at protection and a tough year, would you take a little bit of gold on board? would you buy volatility in the others relative to gold? question about the best person to answer because i'm really in equities guy that my colleagues do like gold. precisely for the reason you

mentioned. it's a good diversifier in their view. should behave quite different to other asset prices. inus: our question -- nejra: was drawn to a comment you made in your outlooks as increasingly easy to see europe undergo capitalization. an-zation. jap compare europe to japan. you can't take a machine gun approach. you can't just buy the index, you have to have a rifle shot approach. there are some really innovative companies in japan, pioneering whole new business models and some great companies in europe. ip achieving great valuations in progress. populations, you have a heavy debt burden, and central

banks that cannot normalize interest rates on their balance sheet. the macro parallels are there. , underneath that, as there always are, some really interesting companies doing some exciting things. the rifle shot approach not the machine gun approach. thank you, rosch. -- raj. next we talked to the ceo of julius baer. they have announced new cost-cutting measures. the conversation is next. if you'remanus: traveling to work, tune in to work, tune into bloomberg radio. this is bloomberg. ♪

nejra: just over 40 minutes away from the start of cash equity trading. i'm nejra cehic in london. manus: i manus cranny in dubai. juliusve the results from baer. switzerland's third-largest private bank grew below the target. let's get to zero. -- zurich, . julius baer. of the market is going to be disappointed with a set of numbers. what are you going to do to shift the dial in assets under management. where have you lost the assets from and what you doing to turn

it around? back in 2018,look we had a fantastic first half. more difficult in the second half of the whole market overall. we lost in our assets under management with the market development, the week equity market. with the proud figures. more than 17 billion on the second highest number we had ever. it came from all different areas. the pressure on the top line margin is coming from two angles. one angle is lower client activity. in november and december. performance-based fees, mainly thanclients has been lower 2017. speedite happy with the on the assets. the commission up by 8%, in line

with average assets under management. a couple of questions are going to come to every person that owns your stock. from you isto know wouldarget, four to 6%, it make more sense to shave back our expectations to what is deliverable in 2019 will you hold resolutely, i can deliver four to 6% in 2019? we feel comfortable, i feel comfortable that we can deliver based on a couple of elements. we are positioned very nicely in the markets globally. some newlso entered markets and we have focused really on the markets where we can make a difference. we invested in thailand and japan. we will see some net new inflows

in there. me commended a bit more on the profitability side. we have put a program in place which the combination of general expenses and personnel expenses to come closer to the 6% target. great to havea: you with us. you've mention some personnel expenses and i do want to ask you about personnel. your predecessor said to have held talks with potential new hires throughout the industry towards the end of last year. you worried about losing talent? losingyou worried about talent? bernard: we have done really well and attracted more than 100 relationship managers to our that form which shows the

attractiveness of our platform. the pure wealth management concept. i'm very optimistic we can deliver on what we call the normalized hiring of about 80 relationship managers a year. nejra: the stock dropped last year, dropping more than 40%. it's recovered a little bit this year but with where the stock price is at the moment, are you concerned you are a takeover target now? bernard: good question. no, i am not concerned for two reasons. valuation, we lost a bit of our premium but if price to net book, it's almost three and if you compare that with some competitors it would be difficult for them to come up a takeover plan and

persuade the shareholders to support it. number two, in our industry there are almost no unfriendly takeovers because it's an industry where you need to have the clients and the people on board. due to these two facts, i'm comfortable and i think the risk for a takeover is low. the board and me want to continue to be in the driver's seat. what the market wants to know is whether there's been any demonstrable shift from the client. we are one month then. shifted?clients how is a month one shaping up? bernard: of course is positive for us and i think for the industry that equity markets are

up on the 7%. it's also positive for assets under management. the exchange rates have turned into our favor. if i look at client activity, it's a bit early to say. think is, it's differently higher than november and december. it has picked up but it's not the level we saw in 2018. manus: thank you so much for sharing your time. baer. julius once to remain in the driver seat. to remain in the driver seat. nejra: the rupee and open is up next. lots of stocks to watch. ryanair. work, are traveling to tune into bloomberg radio.

this is bloomberg. ♪

anna: welcome to open bloomberg markets european open. i'm anna edwards alongside matt miller in berlin. matt: good morning, anna. anna: asian stocks inch higher as the region ends its lunar new year holiday. jerome powell is coming around to a wait-and-see view. a quarterly loss following a