>> good morning. ---- anra to judge, irritated live in westchester. >> and i am manus cranny in dubai. >> weak chinese data weighs on asian equities after the u.s. trade representative dials back on hopes of a deal with beijing. to theresa may will have make good on a pledge to give the commons a veto bon a no deal brexit. and the fed chairman says a balance sheet plan is coming soon. ♪

manus: welcome to "daybreak europe.' the latest red headline on the kim-trump summit, talks are in question as the schedule abruptly changes. what that means, we will wait to hear. they huckabee sanders said expect the conversation to wrap up in a few minutes. we will find out. sarah huckabee sanders says, saying there will be no statement, but that talks are ongoing, so quite a serious pivot. the market reaction, kospi extending drop to 1.3%, with the breaking news across the terminal. an abrupt about-face. is it negative? we will wait to see clarity.

sarah huckabee sanders is not saying there's no statement. it's about the quality of the talks, not speed. that's breaking news, so we wait to see what comes from that. let me give you the breaking news on ab invev. they -- inbev. they still have a lot of debt, $102 billion, so that's unchanged. market, does grasp the organic revenue at 4.9%, expecting 4.4%. in earnings-per-share, quite a cents, thet .80 market penciling in one dollar. 10%, much higher than the market estimate of 6.5%. by the way, heineken taking the abinbevght right to

in china. this is about reinvigorating bud, bud lite in the united states of america. an inflection point, no doubt about it, for ab invbev. let's have a little bit of a decco, one of the world's biggest employment companies. full-year dividend per share, 2.5, missing the estimate of 2.63. let's get straight to the ceo of the company, who joins me now on the phone from zurich, in his first interview of the day. good to see you this morning. what the world would like to about aat -- we talk global slowdown every day. tell me this. you have seen many cycles. what do you see in your numbers that confirms the global slowdown or decries that theory?

good morning. alain: good morning. first of all, i would like to say we are very pleased with the strong operational performance we had in the quarter, despite, yes , a challenging markets backdrop, especially in europe, which i will come back to in a minute. but we have been outperforming in france, in the u.s., in italy, in japan, so quite strong results in the fourth quarter. coming to your question, we see, we continue to see solid growth in the u.s., and see results in the fourth quarter, 7% growth in job staffing in the u.s. we also see strong growth in asia, particularly japan, where withd 6% growth activity,

recruitment activities over 20% growth. in europe, yes, we have seen a slowdown. lack of a lot of -- starting with the brexit situation and the yellow vests, and italy, this is where you see the issues coming. nejra: so given everything you have said, is there any scope to accelerate your cost-saving program? alain: what you have seen, we had been adjusting the cost structure in q4. we've reduced the number of the fourth1% in quarter reacting to the slowdown mainly in europe. when we look at the beginning of this year, we had in january

minus two. looking at the beginning of february, we're around minus two, minus three per cent. with limited visibility, we see that slowdown continuing. but looking at permanent recruitment activities, a very good sign regarding the health of the economy, you see we had a very strong result in the fourth on the back growth, of the same growth one year before. when we look at cyclical activities in the business, we s in thes one per cent fourth quarter, meeting the economies are remaining solid. manus: i think you are taking a goodwill impairment of over a quarter billion euros in the fourth quarter for germany.

what is that good will write down in regards to? alain: mainly from three explanations. first of all, the german regulator has changed the law regarding temporary staffing, in october of last year, reducing maximum 18to months. this has affected the whole industry, not only us. second, we see also a transformation of the auto sector, in the world and especially in germany. germanyur revenues in are in the auto sector, and there was already news this morning. you saw some manufacturers are reducing production of motors, a big transformation. you have explanation, a slowdown of the german economy. i think the german economy, the

german growth has been under the european average growth during the last seven quarters out of the last eight quarters, so that's why we have taken this impairment. nejra: thanks for expanding that. alain, final question on the dividend. the full-year dividend per share, the number coming in a little softer than what the market expected. what is your guidance on the dividends from here? clear capital a policy, capital allocation policy. we have a so-called dividend progressive, we have a so-called stable progressive dividend. de -- ouror shareholders are always secured to receive at least the dividend of the previous year. if profit would increase, we would also increase our dividend. this year, no increase of

profit, so we have kept the dividend stable, which by the way is giving almost 5% yield. you explained the german slowdown so gracefully. i need a compact take on france. they are going after pension reform, insurance reform. are you looking forward to a more free france in the employment market? taken i think france has at the beginning of the macron government already some major reforms, heading in the right direction, giving much more visibility in the case of layoffs and so on. the second wave of reform is much more difficult. they are trying to continue to reform. i think it is very good.

france needs reform. but it is not easy to perform these reforms in the actual social context, so i do hope they will continue to make france very competitive, not only france but europe very competitive. nejra: wonderfully speak to you this morning. adeccoehaze, ceo of group. the latest from hanoi, breaking talks, theump-kim schedule has been abruptly changed. stephen engle is there for us. what do we know so far about this schedule change? getting well, we are word the press conference donald trump was going to give at about 4:00 local time has been moved up to 2:00 local time, so two hours earlier. so in about 50 minutes from now. that's important, because even

kim jong-un earlier this day in the negotiations, when foreign press came into listen in, kim jong-un complained, he didn't want the foreign media in there, because he said face-to-face, one-on-one time with donald trump was short and precious. guess what? it has gotten a lot more short and more precious. does this mean there will be no joint declaration or joint statement? well, that question was posed to the white house spokesperson, sarah huckabee sanders, who said "negotiations were ongoing." keep in mind as well, early on donald trump had said speed is not that important to me, so perhaps right now they have decided to call things off, let things settle, arrange another meeting at another time, but this is purely speculation on my part. maybe talks have completely broken down, or maybe they have gone fantastically. we need to find out in the next 15 minutes.

manus: this is a moment in history. would be great to be on the ground with you. anthony scaramucci, who has worked in the white house. i asked what was more important, a trade deal or a peace deal. he said the trade deal is more important for trump, and poll ratings are up overnight because americans are seeing him trying to break ground in terms of global peace. stephen: that is right. the priorities of donald trump right now are probably the trade talks with china. that doesn't necessarily limit the importance of these talks with kim jong-un. but right now, donald trump is emphasized we have not had a north korean missile test since 2017, and in his estimation that's a sign diplomacy is working. back burnerobably a

issue compared to what's at the front burner, the trade with china right now. are havingi know we to some degree speculate on the reasoning behind these delays at the moment, so just outline what you will be watching for in the next hour or so. we're goingl, to be watching very quickly as the white house motorcade, the vans we saw earlier this morning, they've lined up in front of the metropole hotel, indicating the white house is about to be on the move across town to the jw marriott where the president has been staying, where the press conference will be held. you will see a lot more action in the next few minutes, i assume, to get across town in time for the press conference. so that's the immediate step. beyond that, the big question, are we going to get any kind of signing ceremony?

it doesn't look like there is time right now, to have that done. i cannot say yes or no, but there may not be a joint signing ceremony. there could still be a joint communique. that's what we will be waiting for. nejra: stephen engle keeping his eagle eyes and sharp analysis on the developments in hanoi. thank you so much for joining us. joining us is neil duane, global strategist at allianz, with me outside westminster. thank you for being patient and sitting in the cold as we got through that important breaking news out of the summit. it's not exactly clear, as we have just heard, why we have this delay, but what opportunities would you be looking to take if we see any signs of rapprochement? neil: i think it's interesting. the president clearly needs some political victories for his potential campaign in 2020, and in asia they have always been a little more guarded about how far this will go. so this type of stumble

might be expected, but in the medium-term it is clear behind the scenes that the south koreans and north koreans are talking more constructively. and if that is good for the progress, it's good for the region, maybe some of the risk is off in japan and south korea, despite the tech cycle slowing down, an interesting opportunity to revisit. even president xi, he'd like north korea quiet, or quieter, he has other bigger problems, so there is positive momentum and this is a small step in the right direction, still. manus: good morning to you. it's always hard to trade political risk. as i look at the world this morning, looking at brexit, xi-trump, and trade with china. does any ofnt that come to bear in portfolios you look after?

is there a trade? a really goodit's question. generally, in the last three years, the markets have ignored the political risk, and have waited to see the policy change before starting to price it. i would say, sitting here in westminster, i think the market woke up to brexit in about october of last year, goodness, we are not in a good place. but it ignored it until that time. so i think there is no doubt that the trade deal is the big sentiment-swinger at the moment. one of the reasons the markets have been drifting higher, people think there will be some type of deal. where i don't share the market's optimism, i think the playbook of china will be to pretend and extend, like the japanese did in the 1990's. i think you will see a little bit of a deal on some intellectual property, some opening of china's market, but you aren't going to see them giveaway the key strategic

initiatives president xi has. is in devil with brexit the details, and the details are phenomenally, located. nejra: so would you say equity markets in particular are taking too positive a view on the progress in the u.s.-china trade talks, and perhaps even that markets generally are taking too positive a view on brexit? the u.k. market has underperformed for quite some time. the markets have price to sterling and the u.k. correctly. what i find interesting, we'e made good progress -- we have made good progress this year, but the underlying earnings picture has not been good. dorfnies like byers yesterday saying the underinvested, and that will have to change. we want to see the markets go higher from here, and that becomes dependent on fed policy and the availability of free money. manus: you through a lot of

issues in. we will extrapolate on that. neil dwane, global strategist for allianz. work, are traveling to tune into the radio. we are live on dab digital radio in the london area. this is bloomberg. ♪ ♪

♪ manus: this is "bloomberg daybreak: europe.' i'm manus cranny in dubai. nejra: let's get a quick check on the markets. there's a bit of a risk-off tone across markets, particularly how asia is trading. 0.6%, andindex down not a lot of movement in dollar-yuan. we got weaker pmi's from china, something the market is

digesting, as well as geo-lyrical risk. latest headlines around a delay in the schedule of the trump-kim summit. yesterday indian assets took a hit on relations between trump and pakistan over kashmir, but a slight recovery in the rupee. manus: muhammad ali arian says el-erian to be long -- says you want to be long u.s. theresa may survives another vote. it is hard brexit off the table now? anybody could guess the answer to that. strength., little yen is it a haven trade? do you want some yen on the books, or swiss francs, or generally changing your mood on the dollar? let's talk through some of the data now. we had the first official gauge of china's manufacturing sector in february, showing activity contracting further. it is likely a series of domestic holidays, the global

slowdown, trade war uncertainty all played a part. however, there is a silver lining. the input and output prices rose. so today we ask the mliv question, which will move, s&p 500 or the csi? which will do better in march? you can join that on tv . neil duane, global strategist at allianz. with that in mind, the s&p is no superman, and the csi 300, rocking, rolling february. which one would you like more vicarious exposure to? china,'m definitely long looking into the rest of this year. i've been long china so far. it has moved very quickly, but we are seeing the confluence of economy,zation of the

after the significant underperformance of the last couple years. nejra: i understand the long-term view on china you have. but if we look at this year, how would you advise investors to increase exposure? in h-shares, in the bond market? neil: probably the equity markets are what people think of, when they think about long-term attractiveness of china. we would be looking particularly at a-shares. the technical underlying phenomenon of them joy the indices. but we fundamentally believe president xi and his campaigns are making companies more profitable, more competitive. even with huawei overtones in some sectors, we think there's a lot of good happening in china, so that is where we would play. manus: i saw this chart this morning and could not resist. it's the chinese bond curve. but you go, it's not liquid enough, not enough instruments

in it. but it is steepening. there's a little change in the bottom, but you are seeing a steepening china yield curve, p/em, found equity, opportunity, what does that steepening yield curve tell you? neil: i think the steepening yield curve is telling me the pboc and the economy is trying to ration some capital, and therefore we will see some weaker players get squeezed. but i like that from a financials perspective. a lot of the big stocks in china are the banks. they are being recapitalized, part of the solution to the deleveraging challenge we know that china faces. it faces aina knows deleveraging challenge. the u.s., u.k., italy, france, no idea they understand the credit card will one day run out. so one could look at that as a rational way for the government to manage, you know, stepping on

the brakes to get the deleveraging momentum going, but also allowing them to reallocate capital for the good parts of the made in 2025 china campaign which investors can enjoy. nejra: i understand as well, you have been saying you believe the authorities have the tools in th eir kit to support the economy from here. you mentioned financials and tech. any big-play related to the chinese consumer? neil: we think after the selloff, a lot of the stocks have been hard-hit, but the underlying fund metals of the story, the millennial in the china is probably even more powerful than in the u.k., so we would look across a lot of those areas to build up more exposure. interestingly,, i think if we see a setback in trade, we could see more companies thinking about listing back in china. there will be an element, why are we in wall street?

nejra: we will come back -- manus: we will come back to this conversation, just leaving our viewers with a quick view of hanoi, where there has been an abrupt change of can occasion between the president and kim. we await a news conference. ♪ ♪ this isn't just any moving day.

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manus: this is "bloomberg daybreak: europe." now president trump's summit with kim jong-un has ended early. kim and trump have left the hotel in hanoi. stephen engle is there. in the past 20 minutes or so, i know when we spoke to you a little while ago, it was not clear the reasoning behind this delay. >> we still don't know the reasoning for it ending early. we know both of the motorcades have left from different sides of the hotel behind me.

the trump motorcade, quite long i should say, left in a hurry. i can't read into exactly what happened, but it doesn't look like there will be a joint signing ceremony from this vantage point right now. the president is heading across town to his hotel, where there will be a press conference. maybe this is a trump negotiating tactic. maybe things went swimmingly well. ab they did not. it is a guessing game, but it is significant it ended early. they have moved the press conference up two full hours. kim jong-un earlier today in the hotel behind me had complained time with trump was short and precious and he did not want a lot of foreign journalists asking him questions, which happened. foreign journalists were shouting questions to kim jong-un. he said i don't want you here,

i'm paraphrasing, because time is short. time was a lot shorter than they planned. anus: on the tliv we have blog. this is not good. there is no statement. the markets are reacting. we are seeing the one and we are seeing equity markets take a little bit of a pause here. we have seen this pivot from kim jong-un using american language, he had a good hunch things were going to go well with the president of the united states. we had this mirroring of language between the two. into it be that we just go we will meet again yet come -- again a? >> it could be. donald trump has said he is in no hurry to make this process go faster than it needs to be.

he believes there has not been a missile test from the north koreans since 2017. he says that is proof diplomacy is working. maybe the court shipped this time worked. it is speculation. june of last year in singapore, donald trump left earlier than scheduled. both sides claimed it was a success. i don't want to speculate too much right now, but what we do know is that has ended earlier than planned. ended a lot earlier than planned. we are still waiting for details. let's bring in bloomberg's white house reporter who is also in hanoi. great to speak to you today. what insight can you give us from the president tsai about side- the president's about the reason we have seen this cut short?

>> as of now, we don't know. president trump has spoken optimistically about the talks, but they are running ahead of schedule, so we are anticipating to hear from president trump sometime shortly. our understanding is that this press conference has been moved up. president trump with kim jong-un of north korea saying they were hoping this would be equal to or greater, also drawing on the potential for in president trump's words tremendous economic potential of north korea. you are seeing how korean stocks have slid on news talks ended prematurely. meanwhile, the president also faces pressure in the united states as his former personal attorney and longtime fixer is testifying before congress. it drew much scrutiny and attention from democrats. republican sources i spoke with -- they feel this will

manus: the president of the , they states, his voters see him trying to do a big geopolitical deal with kim jong-un, it has helped his ratings. we don't know. we are speculating. this could be the perfect art of the deal. >> first and foremost, when i covered the first summit with president trump kim jong-un in , it was much more organized. the confusion that alerted the white house press corps -- manus: i'm just going to

interrupt you, kevin. we have a red headline coming through. this is an interruption to both of you standing by. inhave no agreement reached kim jong-un and the trump summit. this is the latest red headline. we now have confirmation, gentlemen. reached.ent kevin, you were saying we are going to have this news conference, so this is going to come down to the kind of positioning trump puts out to the world. >> this was not the summit president trump hoped for, and with no agreement reached now, this is a president who is going to face questions from his international press pool. he's going to have to explain why. the president, according to sources back in the united states, has been facing pressure about how definitive he was

going to get with north korea, particularly on the issue of denuclearization, and how are we going to be defined? now it has become apparent no such agreement has been reached. lavrovr, it was sergei who actually raised the issue of potentially restarting international denuclearization talks. it was also china who had been trying to work with north korea to potentially bring them to the international negotiation table. the low hanging fruit, figuratively speaking, was to be some type of formal declaration of an ending -- a formal ending of the korean war. the cease-fire of which occurred in 1953. president trump now is facing international scrutiny as well as scrutiny in the united states. he is going to face those questions shortly as we are anticipating this press conference ahead of schedule with no definitive denuclearization deal insight --

in sight. anna: --nejra: let's bring back stephen engle. we have been hearing from kevin about the pressure president trump is under at home and abroad with his voters at home watching these discussions. we now hear no agreement. what are the implications for the region that you are in, south korea and elsewhere, of the latest we have heard? >> this is clearly bad news for one of the players on the sidelines for these talks. that is japan. japan has been wanting these talks to have fruit and be successful. japan is also an arch enemy of north korea. they have been the subject of those missile tests going over their territory. japan obviously watching this very closely and perhaps nervously right now as these talks look like they have come to a point where there is no statement.

they have not even been able to add any meat to the bones of that scaled-back joint communique -- manus: on that, there is an additional line here. the white house are saying, this is the qualification which we much -- must give to viewers. the white house saying talks were good and constructive. that is the latest line. we are going to draw a line under that. gentlemen, thank you for being with us. stephen engle on the ground in hanoi. kevin is at the hotel where we expect a news conference. nejra, you have our guest host. nejra: let's get back to neil from allianz global investors. is this an issue now that investors who might previously have been ignoring need to pay attention to? how does that impact portfolios? >> i would have said not.

this is the biggest asia for -- issue for asia and south korea. for everybody else, particularly the u.s. market, they come more to it --

take shift to the european. given that your trades on earnings in america trades on 16 times earnings, that might not be a good shipped. >> we are talking about the u.s. market. the fed keeping an eye on a geopolitical risk, also balancing that against what's happening in the home market. we heard again from jerome

powell yesterday. most notably on the balance sheet. confirming there is some sort of existence of a powell put. >> i think they thought the --ength of the u.s. economy i think they were rightly anticipating that with their moves. suddenly going, oh gosh, this is not really happening. what they are now seeing underneath it is the employment situation pulling people back in to the situation. they are right to be fearing wage growth may eventually reappear. we have been going up because the results have been strong.

the earnings growth is not anywhere near as exciting as it was the last couple of years. obviously, the more the economy continues to travel, the more the fed looks behind the curve. we are in a very interesting position at this time. >> it is fascinating. there was an op-ed overnight on the bloomberg. it basically said the fed's payment is not a green light to jump into every risk. you want to be focused on u.s. stocks. much more to get through. the global strategist at allie on global investors -- allianz global investors stays with us. let's look at the risk ignited between india and pakistan. the indian air force pilot remains in custody. joining us from bloomberg, our partner in by -- mumbai. talks, yet train links closed off.

make sense of it for us. noticed, ityou have is very difficult to make sense both, maybe. a lot of communication from pakistan. multiple factors. the news we have as of now from theindian side is that pilot is in pakistan custody. believe today maybe there is a possibility of tensions not escalating too much. of tensions not getting diffused. it is difficult to really call it right now. less thanlow is a lot it was yesterday and the day

before. markets are taking it a bit more ok. i think the indian markets are doing reasonably ok. marginally in the green. the markets are not having all that unduly. i am sorry to disappoint you, but what i can say is with the kind of statements, or the limited amount of statements coming in, it is difficult to make sense of which way this is going. the only thing i can tell you is that the news flow has subsided compared to the last couple of days. difficult to know exactly where this is going, do you get a sense from the analysts, the investors that you speak to, that they are purely sitting on the sidelines, or they are actually looking for opportunities to perhaps get back in if they are not expecting a big escalation here?

almost everybody, every large investor i spoke to, six of them in the last 18 hours, all of those large investors have said for them, the bigger moving is what happens in the elections. they believe this will get diffused. all of them are waiting for the election to come out. they are not going out gung ho on the markets. looking out for specific opportunities. >> the very latest on the pakistan-india disruption. coming up, trump-kim talks end with no agreement. we will keep you up-to-date on the latest from hanoi. the team are on the ground there . these were the pictures before an abrupt end to communication. that redheadtold

line, which is trump and kim summit in hanoi ends with no agreement, however. discussions were good and constructive. bloomberg radio is your destination on your mobile device. dab digital radio in the london area. ♪

nejra: this is "bloomberg daybreak: europe." got asian stocks extending their declines. annmarie hordern is in the london studio. i was looking for some of the big elements moving on the

breakdown in this communication at the moment. good morning. >> that's right. those collapsing talks out of hanoi between president trump and kim jong-un are moving markets across assets. the msci asia-pacific markets this morning are lower, down nearly 6/10 of a percent. south korea kospi really leading the gains -- the index lower across the region. s&p futures also took a leg lower down 0.3%. brent crude also lower 0.6%. assets,saw across markets go down. i want to show you what's going on with the korean yuan. the south korean yuan. you can see it take a massive decline once that red headline hit the terminal saying talks have collapsed. this puts into question what will happen between the countries as they were trying to negotiate a deal and also what happens with north korea's nuclear agenda.

this is the korean yuan inverted to the u.s. dollar. you can see that massive plunge down on the currency out of the news coming out of hanoi. bloomberg's annmarie hordern. thank you for running us through the reaction to what we have heard this morning from the trump-kim summit cut short. no agreement as of now. let's going on in the markets in the news flow. let's get back to westminster. theresa may has survived another series of brexit votes. amid signs opposition to her deal is eroding. another vote to block you know deal brexit. lawmakers will also get a vote on extending exit data -- exit day to avoid a cliff edge departure. the labour party's alternative plan was again defeated with jeremy corbyn confirming he will back a second eu referendum. global strategist at allianz global investors still with us.

reasons be one of the the arch brexiteers have been a little quiet following this latest vote. do you have faith they will get on board with theresa may's deal? >> no. her deal when she proposed it was so overwhelmingly rejected need 240 mps to change their mind. the second referendum is also irrelevant. march 29 it's appearing we are not going to have one by the. -- and i would agree sterling has had a splendid run. i want to show you a chart. you know what to do.

sterling is up over 2% five-day. volume dropping. >> to be honest, i would have said for most of the last six to nine months, everyone has hated the u.k., hated u.k. assets. what we are seeing is a bounce where people are getting a bit more optimistic that we won't crash out. fundamentally, sterling is cheap. i think maybe a few people realize the politics won't roll us off the cliff eventually and that we will end up with some type of passage. is europe might not give us much time. have already allocated the british-european parliament seats to everybody else. wait untilwant to

the election in may. we might get a couple of months to agree how we are going to crash out. we are not going to get an extension unless we are promising another referendum and a binding one. that possibly they hope will keep us in europe. >> the path of least resistance may be higher for sterling. you see longer-term investors coming in, but there could be a cap. where is that for you even if we get this delay? >> what we would say economically as we think sterling is worth 145, 150 against the dollar. maybe we could raise another five or $.10. that would require a sensible economic policy whether we are staying in europe or whether we are leaving. it's not obvious to me yet that the chancellor has got his act together in terms of how he would protect the economy. it is not obvious the bank of economy nowhere they stand either -- bank of england know where they stand either.

there is still a bit you and i would like to see before we would want to see sterling move higher. neal, dealing with a great deal of unknowns. green. the cold on the we are in hanoi. kevin is on the round at the hotel look at live pictures of where the news conference is expected to start. we broke the news there was an abrupt about-face. sarah huckabee sanders and the white house trying to say things are good. this is saving face, briefly? the white house saying talks were constructive, but no deal reached. that was not the meeting president trump was hoping for. he ended this abruptly. two hours before it was scheduled to end and canceling a final agreement. asian stocks declining on this news. from here, the president is

anticipating to take questions at a press conference in hanoi. nejra: thank you so much for joining us from hanoi. this is bloomberg. ♪

manus: good morning from a dubai. this is "bloomberg daybreak: europe." live from westminster, these are today's top stories. manus: president trump second meeting with kim jong-un ends without an agreement. stocks in asia and u.s. futures selloff. future talks are plan -- plunged into question. china's factories it away is on equities after the u.s. trade representative dial back hopes of a deal with beijing. hanging on. theresa may will have to make good on threats to give a veto over a no deal brexit.

we are live in westminster. nejra: good morning, everyone. just on 7:00 a.m. in london, just under an hour from the start of cash equity trading in europe. we were already seeing asian equities under pressure after those pmi's from china. we are seeing stocks in the newsn extend losses on the from the trump-kim summit ending early, no agreements. taking a look at how european futures are shaping up at this point, ftse futures lower by 0.2%. dax and cac 40 futures under some pressure. u.s. futures extending losses given the headlines we have had from the trump-kim summit. in the bond markets yesterday there was a fork -- a focus on the corporate sales pushing

yields higher. just checking on the bond market. it all comes down to what jay powell had to say in front of congress yesterday. the fed will pay attention to financial market volatility. that message was that you have a vigilant fed. you are looking at live pictures, by the way. it is 7:02 in london. live pictures of hanoi where we are expecting a news conference to start at any moment between donald trump on the back of this agreement -- on the back of this discussion between kim jong-un and the president of the united states. we have more breaking news, we will bring those to you. juliette saly has the fallout from the big conference. good morning. yes, certainly reflected in the kospi, lower by 1.8% in seoul as we heard that

news. these talks have ended without an agreement. the kospi the weakest performer in asia. chinese stocks lower by 0.25%. we had that pmi figure for february coming in at 49.2, showing further contraction. a little more upside in indian markets considering what we saw yesterday. australia close higher ahead of all the latest coming out of hanoi. it is very much reflected in the current demand us -- the currency as well. the yuan has deepened losses, down by 0.5% against the u.s. dollar. traders saying they were expecting there would be an outcome from this summit. markets had been pricing in optimism. now everybody has to step back and reposition. weakness in the yuan. strength in the japanese yen. also watching the rupee. fairly flat. it has become asia's worst performing currency as we

continue to see tensions between india and pakistan escalate. thank you very much. politics is the number one discussion. , theyms of stock traders just delivered numbers across the bloomberg. 1.1 billion, that is bang in for 2019.guidance no slowdown if you think you are james bond and you want your db seven. a little bit later than the market thought. this is still in the eye of earnings season. revenueamerican tobacco 24.49, a little bit ahead of what the market expected. we have some shifts. ben stevens is to retire from the board. brexit, kim jong-un, and u.s. trade deals with china, the

three p's of politics, take it away on the green. nejra: headlines coming fast this morning. joining us now is miles bradshaw, head of global aggregate fixed income. thanks for joining us here. just to look at geopolitical risk, you have heard the latest on the trump-kim summit. in the background, we have still got trump -- u.s.-china trade talks. we have heard from jerome powell again yesterday. just to talk about the does thisal risk, escalation in risk have any implications for your portfolio construction? separateimportant to things going on. the talks in vietnam today are not a big deal for financial markets. we are very far away from where we were in the last summit where there was a lot of hostile words being traded.

in terms of china trade tensions, markets expect some sort of progress. some deal. be someexpect there to deal, so it is still about the rates of progress. it is the same in regards to things like brexit. things are moving in the right direction. what is more important is just seeing china data, way more important than the trump summit for markets, also seeing the reaction from central banks. the ecb next week. the fed at the end of the month, confirming whether they are changing their reaction function about the normalization of monetary policy and where they are beginning to become more concerned about economic growth, providing more support for financial markets. we do not want to be too worried about india and pakistan, but there are risks out there. manus: good morning.

sometimes we get diverted by the headlines, but your all right, it is the -- but you are right, it is the data in china that matters. bedside, still expanding -- bid side, still expanding. do you think we are avoiding a hard landing in china? that is the most critical thing for 2019. >> i think so. we are still waiting for incoming data. the key thing is going to be looking at credit growth and whether we are seeing that bottom out. china has been slowing. policy has been used. you have had -- policy has been eased. you have had targeted lending. there are elements of patients and seeing that data come through. we are optimistic that the policy easing will deliver a slowdown in growth as opposed to

a hard landing and eventually an increase in terms of the rate of growth. we are optimistic china will actually stabilize and will not become a negative for the global growth outlook in 2019. nejra: what does that mean for the fed? does that increase your proclivity for risk if you've got that view on china and you expect the fed to be on course? >> it means we are comfortable with risk assets. there was a big selloff in december. the trade was easier because valuations were cheap. you do not want to chase the whole sector. you need to be very much looking at portfolio construction, looking for things that have not participated in the rally rather than just buying the broad index. for us, looking at things like emerging markets. storiese a lot of local , whether it has been mexico, the middle east, where assets

are relatively cheap. we still like european banks. they have not participated in the rally. we have reduced our exposure to things like u.s. high yields because the has done extremely well. i think the reaction function is the key thing. the fed have changed their reaction function. that is what was signaled to us this year. manus: just a few more headlines across our bloomberg terminal. this is on rolls-royce. let me quickly give you an update. rolls-royce sees the 2019 adjusted ebit coming in 600 to 800 million. they are taking an exceptional item in regards to the close of 80, being phased out. rolls-royce will take an exceptional item. let me take it back to you on the earnings season per se.

we are getting them hard and fast. up with thecaught ceo of adecco. he has taken a hit in germany. he is concerned about slowdown there. what are you doing in terms of trimming risk, adding to risk, we have had a number of other institutions say it's time to take a little bit of money off the table. back on thising grand rally? >> we have taken profits where we have seen repricing assets. we bought high-yield in the u.s. in december. it performed well. we have produced that exposure -- reduce that exposure. exciting. are less we are looking to add risk in other parts of the world where we have not had that rally. emerging markets, and some of it is fx, some of it is external debt. it is really a rotation rather .han increasing or reducing

in the past the markets performed well. think there is more room to rally over the coming months. nejra: we want to get more insight on credit. we have had the rebound in equities. we have also seen significant spread tightening in credit in 2019, some questioning whether the selloff we saw at the end of 2019 is a more accurate harbinger of what is to come. you have talked about high-yield , but what about elsewhere? investment grade and geographically. >> our assessment was at the end of last year that you had slower growth that was a headwind for credit. you have had tightening of financial conditions from the fed, raising rates. you had a liquidation effect where you had a lot of outflows from funds and that resulted in

overshoot. you have seen a comeback. where do we stand now? ultimately, we are not expecting a recession. we think central banks are adjusting to support growth. that means the headwinds we saw last year in terms of balance sheet reduction from the fed will debate. the defaults remain low. we think credit remains good value. really, it is about trimming the bits of the risk the have performed very well. bits of the risk we think are cheap in a sector which is european banks for their credit quality, for the structural changes we have seen in the system. it's a lot of rotation. compared to the end of december, we have reduced risk slightly because they performed very well, but we are still overweight. manus: hold those thoughts. dalio -- risk of recession in the united states.

back very shortly. hanoi,o to kevin in waiting for this news conference to begin. what is the language the white house are putting out the echo we had the abrupt end of communication between the president of the united states and kim jong-un. >> no deal. that long-awaited meeting between president trump and kim jong-un ending nearly two hours -- afterer a one day one day of positive rhetoric coming from president trump and kim jong-un. no word yet on the reason why or what went wrong. the president will no doubt face questions within the next hour or so here inside the hanoi marriott where he is set to hold a press conference. asian stocks extended declines on this news. south korean stocks plunged. the currency sinking 0.5%.

sanderscretary sarah says the talks were, quote unquote, constructive. this is not the deal they had been hoping for, particularly when the ones -- the rhetoric heading into their meeting was so positive. from a domestic standpoint the president is likely facing questions on his formal personal 'storney michael cohen congressional testimony in which he made allegations against present trump from his -- president trump from his time as a private citizen and even his time in office. from here the president now faces scrutiny internationally and at home. here abroad, this is a president who in less than one year had met twice with kim jong-un and just within the last 24 hours called on the international community to assist the u.s. in

bringing together denuclearization talks. he called on japan, south korea, china, as well as others. you.l toss it back to kevin, if the president is just taking the stage right now, we are going to ask another question, but of course the president taking precedence here. we are looking at live pictures of president trump taking the stage at the summit. let's listen in. pres. trump: thank you. we are in hanoi. it is incredible.

we have been going at it and we have been involved in trying to have them stop and we have some reasonably decent news. hopefully that's going to be coming to an end. this has been going on for a long time. there's a lot of dislike unfortunately. we have been in the middle trying to help them both out, see if we can get some organization and some peace. venezuela has been in the news and we are sending supplies.

supplies are getting through. we are sending a lot of supplies to venezuela. people are starting to death. you would really think the man in charge currently would let tose supplies get through the areas that need them the most. it is very difficult. on north korea, we just left chairman kim. time. a very productive we thought, i thought, secretary pompeo felt it was not a good thing to be signing anything. i'm going to let mike speak about it. we spent pretty much all day is -- hejong-un, who

is quite a guy and quite a character, and i think our relationship is very strong, but at this time, we had some options and we decided not to do any of the options and we will see where that goes. it was a very interesting two days. actually it was very productive. sometimes you have to walk, and this was one of those times. i will let mike speak to that for a couple of minutes. >> thank you, mr. president. we have been working, our teams, to team i brought to bear try to develop a path forward so at this summit we could make a big step toward what the leaders had agreed to back in singapore last year. we made real progress and we made more progress when the leaders met over the last 24, 36 hours. unfortunately, we did not get to

something that made sense for the united states of america. i think chairman kim was hopeful we would. we asked him to do more. he was unprepared to do that. i'm still optimistic. i'm hopeful teams will get back together in the weeks ahead and continue to work out. it's a comp looks problem. we have said since the beginning this would take time. we know what the limits are. we know where the challenges are. i think as we continue work on this, we can make progress so that we can ultimately achieve what it is that the world wants, which is to denuclearize north korea and reduce risk for people around the world. i wish we could have gotten further, but i am optimistic the progress we made in the run-up to the summit as well as the progress the two leaders made over these past few days put us in a position to get a good outcome. kimpresident and chairman

both felt they had made that progress, but could not get along the line any further to make a deal that would have been bigger at this point. thank you, mr. president. major, please. >> has this process been more difficult than you thought? was the north korean demand for lifting of some sanctions the real sticking point here in that you did not want to do that and they did? pres. trump: it was about the sanctions. >> will there be a third summit? pres. trump: they wanted sanctions limit -- lifted in their entirety and we could not do that. they were willing to denuclearize a large portion of the areas we wanted, but we could not give up all the sanctions. we continue to work and we will see. we had to walk away from that particular suggestion. we had to walk away from that. >> will all sanctions currently

in existence remain? >> they are in place. a lot of you folks have said, we have given up -- we have not given up anything. frankly i think we will give -- end up very good friends with chairman kim and north korea. i think they have potential. potential.e we are going to see. it was about sanctions. they wanted sanctions lifted but they were not willing to do an area we wanted. they were willing to give us areas, but not the ones we wanted. know, there is an incredibly complex set of issues at play in terms of lifting sanctions and what denuclearization is. did you get any distance toward what kim's vision of denuclearization is? pres. trump: we did. >> there is a line of thinking that he wants to keep some nukes. would you allow him to do that? pres. trump: i don't want to

comment on that exactly. he has a certain vision. vision. exactly our it's a lot closer than it was a year ago. eventually we will get there. for this particular visit, we decided that we had to walk and we will see what happens. gentleman nobody has ever heard of. sean hannity. should we let him to a question? john? he wants the sanctions completely off and you want more on denuclearization, how can you bridge that gap between now and the next time you might sit down? pres. trump: with time it will be bridged at a certain point. there is a gap. we have to have sanctions and he wants to denuclearize, but he wants areas of that are less

important than the areas we want. we know the country very well, believe it or not. we have to get what we have to get. that is a big give. please. >> i work in radio and tv. mr. president, thank you. mr. secretary, good to see you. if you could elaborate a little bit more. we have some history. president reagan walked away in reykjavik. a lot of condemnation at the time. it ended up working very well for the united states. was it mostly your decision? what message would you want to send chairman kim as he is listening to this press conference about the future and your relationship. pres. trump: i don't want to say it was my decision, because what purpose is that? i want to keep the relationship and we will keep the relationship. we will see what happens.

as you know, we got hostages back. there's no more testing. one of the things chairman kim promised me last night is, regardless, he's not going to do testing of rockets and nuclear. i trust him and i take him at his word. in the meantime, we will be talking. mike will be speaking with his people. he has developed a good relationship with the people representing north korea. i have not spoken to prime minister yet, i haven't spoken to president moon, south korean, but we will. we will tell them it's a process and it's moving along, but we felt it was not appropriate to sign an agreement today. he could have. i just felt it wasn't appropriate.

>> two questions, if i may. did you learn anything about chairman kim through this meeting? while this was going on, the drama back in washington, your former lawyer michael cohen, his office right next to yours at trump tower, he called you a liar, a conman, a racist. what is your response to michael cohen? pres. trump: is incorrect. it's very interesting. i wasn't able to watch much because i have been a little bit busy, but i think having a fake hearing like that and having it in the middle of this very important summit is really a terrible thing. they could have made it two days later or next week and it would have been even better. they would have had more time. having it during this very important summit is so incredible. he lied a lot, but it was interesting, because he did not

lie about one thing. he said no collusion with the russian hoax. i wonder why he didn't just lie about that like you did about everything else. he lied about so many things. , ias impressed he didn't say think there was collusion. he said no collusion. byas a little impressed that, frankly. he could have gone all out. he only went 95% instead of 100%. the fact is there is no collusion and i call it the witchhunts. this should never happen to another president. this is so bad for our country. you look at this whole hoax, i call it the russian witchhunts, i now add the word hoax. it's a very bad thing for our country. fact --pressed with the because the most important question there was the one on collision and he said he saw no collusion. we will see what happens. it was pretty shameful.

trump.ident >> how about one of you instead of three? >> i have the microphone, so -- pres. trump: the person in the front. no, not you. we will get to you. thank you. likeat was the atmosphere when you walk away from the negotiation table area >> this was very friendly. we shook hands. there is a warmth and i hope that stays. i think it will. we are positioned to do something special. this is not me. this should have been solved during many presidential runs and people talked about it, they never did anything.

i get a kick out of so many people from past administrations telling me how to negotiate one -- negotiate. when we walked away, it was very friendly. you might want to speak to that for a second. everyone is very focused on how we continue to build on this. closer then we were a month or two ago. will progress was made. everyone hoped we could do better, but the departure was with an agreement we would continue to work on what has been a difficult problem. both sides are resolved to achieve it. everyone walked away in that spirit. >> you are from very different political systems. you are from different generations. pres. trump: a very different

system. >> how do you find you guys in common? pres. trump: we just each other. have a good relationship. it's a totally different system, but we like each other. in the back, go ahead. >> do you think it was premature to have held the summit when all these things had not been tied down? night, signing agreement today. i'm wondering whether you can sketch out what the next three months look like. pres. trump: always have to be repaired to walk. -- you always have to be prepared to walk. i could have signed a deal you people would say, what a terrible thing he did. there was a potential we could have signed something. i could have signed something today. we had papers ready. it just was not appropriate. it right then do do it fast.

>> i am a reporter from south korea and i appreciate your effort to advance denuclearization. could you elaborate on the options and the various ways you discussed to advance denuclearization? pres. trump: we discussed many ways. the denuclearization is a very important word. it has become a very well used word. a lot of people don't know what it means. to me it is obvious. we have to get rid of the nukes. he has the chance to have on of the most successful countries on earth. incredible location right between -- think of it. have russia and china and south korea. you are surrounded by water. among the most beautiful shor