there has been a risk on tone for markets in asia, with japan equities leading gains. chinese equities are a little lower. a mixed picture -- could we see a mixed picture in europe as well? futures are pointing to green across the screen. u.s. futures have also been in positive territory after the s&p 500 closed flat yesterday. as we open up, we see the ftse 100 opening in positive territory, not hugely to the upside, just by one or 2/10 of a percent. at the moment we are seeing moves higher in terms of equities, just waiting for an opening price. it can sometimes take a little way to get going. we are seeing green across the screen on a headline level in terms of these regional equity markets. it will be good to see how the

industry groups are shaping up. let me walk up and show you what's happening with the imap. right out of the gate, we are seeing more green than read on the screen in terms of this imap, you are also seeing tech stocks up a quarter of a percentage point, one of the laggards in yesterday's session. energy also on the front foot, given that we are seeing this rebound and wti may be part of a risk on as well as concerns of venezuela. it is mainly just for communication services showing a little bit of softness. to the upside, you are seeing cargo, wirecard, these are some of the stocks outperforming -- lower and leading some of those options in terms of percentage moves.

>> thank you very much. the european equity market is opening higher, interesting story around the cargo, expanding its tech licensing to that isa with a deal putting fire under the share price this morning. let's look at things happening in the u.k. and go to the political story. parliament has taken control of the brexit timetable. --resa may will now decide she has perhaps left her role in deciding the course of brexit, although she still hopes are deal is on the table. now we see a number of options remaining open, including a second referendum, staying in the customs union, leaving without a deal, and canceling brexit altogether. could all of those options be on an indicative vote tomorrow? we should see members of parliament voting on that. let's talk about brexit and the start of trade today and see what we think will happen from here.

great to have you with us. seen, parliament taking more control. how would you assess things have changed? the balance of risks and outcomes that remain possible from here? give us your thoughts. >> we will learn a lot more about the outcome when it comes to vote. the question is whether they can rally behind the outcome of the referendum. both major parties are committed to doing that. it will be aon -- day of high drama. in terms of the market, we have to see the impact it has on sterling and the applications for u.k. domestic growth, but it will take a long time to see what that is going to be. what are your thoughts on

where the pound goes? obviously it depends on the outcome. but if parliament does seem to coalesce around something that looks like a softer brexit, will that be unequivocally positive for sterling, or does the remain position -- does that require more discussion? >> my view is that if you think about what sterling is, the volatility of sterling has been quite remarkably low over the last year and a half. on the fundamental baselessly think the value -- all things being equal, we think sterling will rally. brexit,ext of a softer you would expect the pound to rally and you would expect that in the ftse 100. on the other hand, if we had a harder brexit -- the most you can say, sterling will not be

trading where it is now. saw ig group describing sterling as being like a coiled spring at the moment. how long does it remain coiled? it could be we find out more tomorrow, or if tomorrow just means a long delay, and the pound could remain coiled for nine months a year. group andribute to ig i think it is more likely -- if parliament comes up with at least a roadmap for a way -- sterling i think will probably move accordingly. if you take into account with the monetary policy situation is, it comes with so much. but that underpins growth and the bank may well be in a

position to consider interest rates in the currency market, taking that will upfront and move the currency accordingly. asking brexit related questions this morning, it relates to brexit but it could take assets much further afield. which do you think would behave positively if we were to see of brexit, which hasn't increased in probability? if we see a harder brexit, which assets would benefit? expect youyou would would see something of a risk andmood in equity markets there would be a cloud of credit i think there would be a move

lower and that is certainly what we saw at the time of the 2016 referendum. >> i talked to one of our guests -- the low yield environment, central banks -- is thatish, something you see at certain parts of the curve? >> it is always very tempting to look at everything through the prism of local circumstances, but there are other things going on. market came on the cloud of last year and --prisingly we were looking -- it was not giving you a particularly handsome return but everything else was under more of a cloud

and you are obviously right -- you have to get to the widespread weakness of manufacturing, evidenced by the pmi -- there's been no change yet in new orders, and we would think about this as a respectable indicator -- but on the other hand, on the consumer side of the economy, inflation remains absolutely contained and there is very little impulse to cause of central banks to change their mind -- as a result real incomes are rising around the world. you have this dichotomy between the manufacturing sector which in terms of total output is a the servicesent side underpinned -- it looks pretty healthy. you arrive at a point in which growth has dipped toward trends

in most areas but to my mind we have had some extraordinary depressants within that, not least the dialogue between the u.s. and china over trade, the emissions test in the eurozone, the yellow vest protests in france, and that seems to be depressing in the short-term. >> thank you very much. we will talk much more about the euro economy and where it goes from there. that if europe equity strategy at jpmorgan asset management stays with us. up next, the stocks on the move so far this morning, including reports that a medical equipment maker could be an acquisition target. this is bloomberg. ♪

♪ >> welcome back. 12 minutes into the european trading day. this is bloomberg tv, the european open. let's get a look at the markets. european equities are bouncing this morning, up by between 1.3%. one of them is fairly flat but we are seeing modest gains after asian stocks bounced quite convincingly because of the selloff that we saw yesterday. around.

let's get your individual stock movers. stanley berger has those fourth. >> it is also getting help from the individual stories. this is the biggest momentum name and the stoxx 600, meeting it has the biggest gains over the past 12 months continuing, up nearly 5%. this is its highest price on record, it fuels the technology licensing deal with an australian supermarket, so the gains continue. 8%.ert tech also higher by iss is m&a news, eq t interested in taking over the company. this isn't the first we have heard of this, we have hedge fund owners telling us that we or arecontinue a sale these reports going to stay in the rumor mill. 1.5% is where we are seeing the gains today. in france, sealing a

deal with airbus, double value macron expected to be when he talked about it last year. much.nk you very a bigger deal than was expected for airbus from the chinese visit to paris. the french economy grew by .3% in the fourth quarter, exactly in line with estimates. that comes amid a period of week data readings in europe that have helped push the german ten-year bond yield below zero. with that constance at a crossroad, is it headed to full recession or turnaround? great place to start the conversation, with the head of europe equity strategy at jpmorgan asset management. we saw giant data well below fridaytion, pmi data on for a number of european economies. italy already in a technical recession. germany just dodging that. will it get better or worse from here? >> my sense is in the short-term

it is going to improve. the indicator that i mentioned is what's happening on the credit side. credit came under pressure earlier last year, and it does seem to be recovering at the moment. my sense is that in the short term at least growth is likely to strengthen little bit. you saw the ecb and the european commission both downgraded, and they also think that when the down,f the world tips europe will not be proof against that. it will said earlier, evaporate in the first half of the year and if we take a constructive brexit outcome, that will change the behavior from a lot of people in the supply chain who have been running excess inventories, and even that is a depressing factor. said, but all being

is it possible to see a rebound in euro without some kind of rebound or strengthening in china? is that a key part of this story? >> that is absolutely key. the slow down in the chinese economy is a great deal more aggravated than people expected last year. chinese authorities are that it, in my sense is impacted the emerging markets team. either the u.s.-china trade conversation is working productively are the chinese government will stimulate further. but it is an external factor for european demand. but let's not forget that on the domestic side of the economy, unemployment is shrinking and real income is rising. you never look to the eurozone consumer to go on a spending splurge, but it does mean that consumption will be will underpinned. >> and what about european

governments going on a spending splurge? i think it was morgan stanley talking about this sense of fiscal stimulus, that we could se in the year ahead, from a low base or relative to low expectations. perhaps germany might deliver more than what was expected, maybe france in the wake of the yellow vest protest. what is your expectation? >> i think morgan stanley is exactly right, they are very smart people. in france you will see a modest amount of fiscal easing, in germany a certain amount more. the question is what will happen in germany. germany is wedded to policies which means that they run a balanced budget over the course of the cycle. as you get toward a point of hand over power from chancellor merkel to a potential successor, you might see loosening. but thankfully i don't think he would look to germany to ease

fiscally in a very pronounced way. it is more likely that you would see a little bit more in france. thank you very much. of europeith us, head equity strategy for j.p. morgan asset management. bloomberg, wer on talk brexit with the former greek finance minister, yanis varoufakis. after 9:30 a.m. london time, he is often forthcoming on his insight with what it takes to negotiate with the eu. plenty more to come on the subject of brexit. this is bloomberg. ♪

♪ welcome back to the european market open. 21 minutes into your equity trading day this tuesday morning. european equity markets are turning tail and retreating to the red after we saudis and rebound in the asian equity story after monday's selloff. let's move on. the ceo of one of japan's largest banks isn't concerned about yield curve inversion. says you would you water there is no reason to because mystic about the global economy, especially when central banks have become more sophisticated. we spoke exclusively to bloomberg with the milken institute's japan symposium in tokyo. >> [speaking japanese]

andy impression is global 2019, but the reversing of yield curve symbolizing trends. as i recall, that happened in 2007. i think we have come to raise monitoring levels. there is a time lapse. in 2007 the recession, came a year and a half later. i think it's a matter of how to view the situation. dollars tend to be bought in crisis, but the same trend is true with the yen. we are seeing yen buying when the situation is uncertain. also due to the shift of u.s. monetary policy, the yen has state higher, and this is something we have to watch out for from last year. they have come to a time when we have to pay -- to the economic situation of china and others, especially because japanese exports are affected. have made aou

downward revision for the outlook, the economy and the interest rate, well sticking to also the target and altar easy monetary policy. what do you say about the directing of policy? >> [speaking japanese] >> u.s. made policy turns in when the economy is solid. i think the turning point was the earlier than expected. i also think u.s. monetary policy came too early, as rates would have had more room to cut if they had been raised more. our view of the doj's policy has wrought us to exit inflation. this is a big and competent.on the other hand we have to raise monitoring levels on the side effects of the policy. 2% inflation policy is a means, not a goal. the goal is a stable economic call. we have to come to a time and consider whether the policy is appropriate, and consider the impact of the reversal rate.

i think the boj people know these things very well and are doing a very difficult job of navigating monetary policy. koji fujiwara in tokyo. our guest is still with us. let me ask you about the inversion of the yield curve that we have seen so far, three months to 10 years. i saw one comment piece by my colleague, robert burgess, that says the market is confusing correlation and causation. to what extent do you draw a direct link between what we've seen in yield curve inversion and talk of recession? i think the drivers of the u.s. economy remain healthy. there is one element over the last few years and the next two years which i think will be interesting to watch, the effect of the tax cuts, which were in impulse to growth in 2018.

diminishese actually and i think turns into a headwind in 2020 by virtue of changes to the tax code. we were talking earlier about cuts -- there is no issue in the united states, jobs numbers still look extremely healthy, real income is rising. on the manufacturing side, clearly there are two things going on. first of all, the global supply chain is crested by talk of a more aggressive trade. and if you look over the last six or seven years, you haven't seen the growth of productivity you would want to see, because productivity growth is the magic been that gives you real growth at the cost of nothing. it would nice to see productivity rising, but for a whole variety of reason it hasn't, into my mind that is one of the reasons growth has been underwhelming during this cycle, both in the united states and elsewhere. in parentheses on that, the important thing is that it is

way more significant for a low growth economy like the eurozone or japan than it is in america. it will be a greater benefit their. but leaving that to one side, my sense is that growth will decelerate, and that is why i pivoted so dramatically in january, talking about stopping the process of quantitative tightening in september. there so much on hold and data dependent, and there are areas of data, particularly on the consumption side, which leave one feeling untroubled about the future. >> ok. thank you very much. weeresting to ask whether should be thinking about the possibility of recession, or something that looks a bit more like trend growth. may be the two sometimes. ahead of europe equity strategy at jpmorgan asset management. let's show you the world map, with what's happening to european equity markets. we saw yesterday a big selloff in asia and a big rebound in

today's session. european equity markets, amongst all of that, a little prone to drift. fairly flat on the tariff market, a little upside in london, downside over in germany. this is bloomberg. ♪ this isn't just any moving day.

this is moving day with the best in-home wifi experience and millions of wifi hotspots to help you stay connected. and this is moving day with reliable service appointments in a two hour window so you're up and running in no time. show me decorating shows. this is staying connected with xfinity to make moving simple. easy. awesome. stay connected with the best wifi experience and two-hour appointment windows. click, call or visit a store today.

♪ >> 30 minutes into your trading day here on the european market. these are your headlines. may loses control. you get parliament votes to take charge of what happens next in the brexit process. will this lead to a longer delay? buying in bulk. xi and macron shake hands on an airbus order, as the chinese president makes visits to paris. and uber makes its mark in the middle east with a $3 billion purchase of rival korean. it is a ride-hailing giant's biggest deal ever. welcome to bluebird markets. this is the european market open. on anna edwards, live in westminster. we are keeping tabs on the u.k. politics story.

european equity markets are drifting downward in the early part of the trading day. let's recap what has happened to brexit over the last 24 hours. we saw parliament voting to take back control of the process over the next couple days. certainly tomorrow we will see this indicative vote process taking place, we don't know the details but mps will be asked to vote for their favorite brexit option, perhaps to rank them, and the idea is that then the house gets some kind of sense of which type of brexit they could get behind. this is all the brainchild of a cross party group of mps. former tory minister said parliament needs to allow itself a couple days to do what should have been done over a couple years. there's a lot to do over the next couple days or so. will this mean that indicative vote shows us the way forward, or will this process be used to try to whip the the r.g. into line between the theresa may deal? it could come back for a third vote.

we will wait to see if that is something theresa may believes she has support to do. a lot of questions. let's get the first word news update. >> thanks. president trump's ally, senator lindsey graham, has called for a new special counsel investigation, this time to look into the barack obama government and why it decided to open a probe into election meddling in 2016. the question he wants answered is, was it just an excuse to spy on the trunk campaign? the president says those behind the russia probe will be "looked at." uber has confirmed that buying a dubai-based rival for $3.1 billion. it will allow the ride-hailing company to emphasize its global footprint relative to rival lyft. it will be the priciest deal for them ever, and marks the first time the company has bought a regional competitor. lower michael evan

not he has been charged by federal prosecutors for trying to extort millions of dollars from nike. the also faces charges of embezzling money and defrauding a bank. the lawyer foras stormy daniels in her lawsuit against president trump. he says he will fight the charges. global news, 24 hours a day on air and at @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. bloomberg this is bloomberg. >> thank you very much. the chinese president has brought his belt and road initiative to europe, securing a memorandum of cooperation for the italian government. he is expecting a tougher challenge of paris, so where do we stand in relations between china and europe? italy and china signed a series of agreements, including accords in sao paulo.

it triggered within italy's coalition government. france doesn't plan to sign a memorandum, though there was a big win for macron, as airbus secured a $35 billion order from beijing. macron has invited the german chancellor and jean-claude juncker to join talks. this comes as the eu has been reshaping its strategy toward china, including screening foreign investments. last year, you governments agreed on a proposal to weaken antitrust standards in a bid to diminish the threat from china to allow european corporate's to fight off that chinese challenge. joining us now for an exclusive interview from hong kong is helen wong from hsbc. really good to have you with us. the chinese growth story is very important to europe, then. what are your expectations for how the chinese growth story will rebound in the second half of this year, if that is what you see? >> thank you. i think china is doing quite a

lot to stimulate this economy. we expect the economy will continue to grow about 6%. there has been a lot happening, and one of the key things more recently is the opening up of the capital markets in china. we think that is exciting. >> indeed. the opening of the capital markets. what is still left to be done, because opening up and making more transparent these capital markets is part of the wider trade tensions between the u.s. and china. what still is on the to do list? what further progress would you like to see an opening up china? >> well, we are looking at the capital markets. for years, global investors have been feeling interested in this again, they say that distance is not for today, but for tomorrow. we believe investing into the china capital markets --

tomorrow has come, and obviously a lot of investors have been investing into the market through some of the connections china has built over the past two years. we talk about the stock connect, the bond connect, and the see ibm direct. there has been a lot going into it. last year, if you look at investments into the china bond market, it exceeded 80 billion, which is the largest recipient of foreign investments into the bond market. obviously increasing of government and policy bank bonds into the bloomberg barclays aggregate index will be a game changer. we have been talking about this for some time. obviously it will come on board in april, so this is exciting, because from what we have been talking to investors around the world about, in europe, asia,

they are talking about capturing this opportunity, to invest in the china bond market. can i ask you specifically about the greater bay area in china? what are your intentions in that particular part of china, hiring and revenue targets? give me some specifics. >> thanks for that. we have been investing in the bay area for some years now. we have the largest foreign bank in that part of china, and indeed it is because of hong kong, where we have a rather prominent this is an -- as china embarks on greater bay area offices that will engage, continuing to expand business, working into a scale market. but then again we are looking at

some of the policies that have been announced, to see whether more cross-border investment and the flow of goods will be happening for this part of the world. but then again, it is not just trade, it is also about investing further into china. you said that you see china continuing to grow at 6%. what about default rates in china? is the rising level of default something that is impacting your business? are you going to have to change her lending policy in response to that situation? think there is reason for the growth that we can look at, and obviously we are the largest one in china. we have clients thinking about what they do in china, to support them doing business there, and as i was talking about capital markets, i was in

a situation with investors around the world to invest into the china market. so the business is not limited to just lending on the balance sheet. we are talking about capturing all aspects of the chinese economy. there are certainly factors that most are happy to look into. for example, a growing technology sector, the house care sector. there's actually a lot of interesting factors in the economy that we are interested in, and we see that investors are interested in as well. >> thank you very much. helen wong, ceo for greater china in hsbc. up next, some of the stocks on the move this morning, including the british department surging the most since the 2006 ipo, after forced iraq says it is considering a takeover offer. this is bloomberg. ♪ mberg. ♪

♪ >> welcome back to the european open. 43 minutes into your trading day this tuesday morning. european equity markets are drifting after we saw asian equities rebounding from monday's weakness. let's get back to the politics

story. we are live in westminster. parliament has taken control away from theresa may and will now decide the course of brexit, or at least it helps to. it sees a number of options open, including a second referendum, staying in the customs union, leaving without a deal, and even canceling brexit altogether. joining us now is nigel evans, u.k. can conservative mp an executive secretary of the 1922 committee to represent backbencher conservative mps. good to have you with us. what do you make of parliament taking back control? hasn't, or could theresa may still fight on? >> everything is possible. parliament hasn't taken control. let it has done, it has basically decided that they are going to give mps some option, which they will vote on tomorrow, in order for the prime minister to have some sort of indication as to what parliament would pass. but of course, the problem for somebody like me who voted to campaign for brexit, is

inconsistent with what other people voted for, which is that we wanted it decided in the united kingdom. will we be able to do free trade deals? would we be able to control our own borders? would we stop paying billions into the european union? if we come forward of a solution, that keeps faith with what the people hundred four in 2016. but if we go down the road of the customs union, that stops us from doing some of those things, in that means we are betraying with the people voted for. >> the conservative manifesto redlines you described, it might not necessarily be what everyone who voted for brexit voted for. they might not have had in mind those for red lines that with the cross on the paper. >> what they were voting for was to leave the european union. it wasn't one foot in, one foot out. >> that is open for i interpretation. >> know it is not.

brexit wasn't on the ballot paper so you can't have soft or hard independence, you are either independent or you are not. i think part of the problem is that over my shoulder you have a parliament that has three quarters of its mps who voted to remain. you have a remain prime minister, and cabinet that voted three quarters remain, a remain speaker as well, who is clearly being center stage during these processes, and you have a leave country. we are in an awkward position. i've never been here before. normally politicians let the people down, but across my shoulder you have politicians who believe that people have let them down. everybody thought they would vote to stay in the european union. it was there to ensure the public would be fighting -- they said no, we want independence from the u.k. this is a huge dilemma and i think democracy is on a trip to

because if we vote against what the people voted for and we mentioned that second referendum, which is code for overturning the verdict of the first referendum -- >> it could be at -- let's take, it could be a conference were a vote, taking back to the people. is this the type of brexit you voted for, because you have made assumptions about those red lines, but those weren't on the ballot, so let's put them on the ballot in say is this the kind of brexit the want? >> what we know is that there was a very hard-fought campaign, and we said we were not going to pay billions into the european union. we said we would control our own borders. we said -- we must accept it. and for three trade deals across the world. if we accept all of that -- and that was part of the campaign, and people voted for that -- >> but not everything has gone

as predicted by the leave campaign. >> because we had that useless general election in 2017, with the labour party and conservatives spotting, saying they would deliver what the people voted for. and then ever since we've had a minority government. we rely on the support of the conservative party and theresa may cobbles together some deal with forgets about the eu fees, so we lose their support. she then loses the support of the brexit supporting mps in her party. you got an indication, when the prime minister put forward a motion to parliament, saying show we extend article 50 beyond march 20 9 -- 188 conservatives voted no, and 112 including herself voted yes. that's in me says the prime minister has lost the authority of her own party. people are asking me, how long as she going to be? not only do i not think will she be switching on the christmas lights, i very much doubt

whether she will be giving away any easter eggs as well. >> is it still possible for her to name the date and for that to be sufficient to bring round the er g, give somebody else a chance to negotiate the next part of brexit? and that will be enough -- >> the best chance for her getting her deal through is for her to announce the timetable for departure, so everybody knows she is going to go for deal goes through, and differ deal does go through, she has to leave. we will have an orderly selection between the conservative mps as to who the candidates are. the membership will then decide -- >> can any of that be done by april 12? >> no. >> so you need an extension? >> we will see where it goes. we can do it fairly quickly, but it cannot be a coronation as it was last time.

the membership are demanding they must choose to the next leader of the conservative party is, and as secretary to 22, we have regular discussions about these matters. we will get it over and done with. >> might we end up with a general election here, if the members of parliament vote for something in this indicative vote, that looks different from when we started this conversation, talking about how the conservative party would have to call an election related to confirmation from the people? >> i think we are looking towards an early general election, but it is not going to be before theresa may resigns. she said she wouldn't fight to the next general election in 2022. she's not going to get anywhere near that. everyone knows her authority is completely broken. she has three more ministers not a stronge is and stable theresa may we all remember. >> our international viewers my dear confused, but you are in the same political party. this is the extent to which she has lost support.

does the tory party hold together through all of this? >> not with theresa may. we now need to get this through. you mentioned april 12, an important deadline. she can stay until all the various its of legislation necessary to get us out of the european union by may 22, the other day, but then she has to go. we can then have an orderly transition to a new leader who will have the authority of the membership, and they can bring the party back together again. >> thank you very much. nigel evans, u.k. conservative mp and executive secretary of the 1922 committee, one of the many voices within the party continually calling for theresa may to consider her position. let's get back to the markets. individual stock movers with dani burger. >> good morning. look at some of these moves on the board.

even though the benchmark looks pretty calm, this shows how much volatility is under the surface. dividends of higher, considering a cash bid from sports, now highest price since it ipo'd. outlook andur year removing its buyback program. that is something that really gets investors concerned. finally, ferguson, another negative update from this company, saying it is now pricing in the lower range of what analyst saw, treating outlook as weak. socgen also saying these numbers are sure to upset the market. we are certainly seeing that, down by 9%, its biggest drop since 2017. >> thank you very much. coming up, apple goes hollywood. steven spielberg has a plan to take on netflix, amazon, and disney, next. this is bloomberg. ♪

♪ welcome back to the european open. nearly an hour into your trading day, 55 minutes. the asian equity session selloff yesterday, rebounding today. things are a little different here in europe, a little more skeptical, perhaps, about the asia rebound in the european trading day.

after weeks, months, years, apple finally reveals it's all in as the services company and a star-studded event in its cupertino, california headquarters unveiling its new offerings, including news and magazine subscriptions for $10 a month. it is also offering a credit card tied to apple pay in association with goldman sachs. one of the day headlines was apple's new original video service, featuring hollywood heavy hitters like steven spielberg set to take on netflix, amazon, and disney. let's get to alex webb from arotech team at bloomberg opinion. any surprises? i have seen a lot written about what was not presented, the price of some of these products for example. what surprised you? the gaming platform was the one thing we didn't know it huge amount about. everything else was pretty well telegraphed. leave even knew the identity of some of the people who were going to turn up. they kept on having -- the stage went to black and the lights came up with a big hollywood star. reese witherspoon, jennifer

aniston, steven spielberg, oprah winfrey. but it was very short on detail. some pricing wasn't entirely clear. they said it would be $10 per details ofthe bigger how it will be prices nationally, what exactly is in the content, they were short on those details. >> i think i saw the cast of "sesame street." that i wasn't expecting. should netflix be worried? >> not really, know, because netflix has a huge defensive mount, and it has so much content and several hundred million subscribers. it is going to be very hard for apple to break down -- i think a lot of people say there are some good shows, but apple has a long way to go. much.x, thanks so alex webb from bloomberg opinion with the latest on apple, the full pay that from a hardware

company to a services company is underway. this is the european open. stay with bloomberg television. lots more from westminster. this is bloomberg. ♪

♪ china's president xi

signs contracts with france during his visit. the u.k. parliament takes over the brexit process from prime minister theresa may. wednesday -- lawmakers vote wednesday on the next steps. good morning. good afternoon if you are watching from asia. it's tom and francine from london and new york. let's bring up the lies pictures -- the live pictures of paris. newsnk we are exiting a conference shortly between the french president emmanuel macron and the chinese president. we will look at brexit, with that movement in those amendment yesterday, leaving parliament taking back control. tom: brexit really front and some words -- front and center with anna edwards on the green. in america, you know once we get through the mueller-athon, china

and u.s. is going to be back on the radar. the timing of it is really extraordinary to a distracted america. francine: we were covering the eu leader summit thursday and friday. about 50% of the discussion was on brexit. the other 50% was on how europe deals with china, italy and france signing these deals on their own, not part of the eu. let's get straight to the bloomberg first word news. here's viviana hurtado. viviana: a new special counsel investigation. that is the demand from president trump's ally senator lindsey graham. he wants to look into barack obama's government and why it decided to open a probe into election meddling. the question he once answered, was it just an excuse to spy on the trump campaign. the president says those behind the probe will be "looked at." dozens of airstrikes across the

gaza strip carried out by israel, beginning with a rocket attack in the center of the country. risky for could prove netanyahu. he is facing a tough reelection battle on april 9. more than $1 billion of infrastructure may have been destroyed by a cyclone that. tore across southern africa. that's according to the -- cyclone that tore across southern africa. that's according to the united nations. the death toll has climbed to more than 700. the you in says more than 100,000 homes -- the you in -- the un says more than 100,000 homes were destroyed. apple unveiling a streaming tv service called apple tv plus. it will also provide access to outside channels. apple says pricing and availability will be announced later this year.

global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm viviana hurtado. this is bloomberg. tom: equities, bonds, currencies, commodities. futures flat. curve flat. oil not doing much. the vix 16.20. you can do better than me, i'm sure. francine: i don't know if i can. it is a little flat. treasuries pretty much falling. then you can see the german yield is still the one we need to keep a very close eye on, - 0.002. byo area banks will know june how generous the terms of the ecb's new loans are, the tltro. we are getting some new

pictures. let's see what is going on. you can see mr. jean-claude juncker with french president macron. i think he has just arrived at the elysees palace. that is the courtyard, and and they coincide -- they go inside. i have to think president macron has had a hand in redecorating. tom: the symbolism is really front and center. i would suggest with brexit may be on a re-ascendant or newly ascendant macron, dealing every weekend with the yellow vests, may be a wonderful distraction from his domestic difficulties. francine: let's get on to brexit. parliament has taken control from prime minister theresa may and will now decide the course of brexit. this leaves a number of options

open, including a second referendum, leaving without a deal, and canceling brexit altogether. the next stage is indicative votes due to take place tomorrow. joining us from westminster is bloomberg's anna edwards. for our international audience, this is probably quite confusing. what exactly happens in parliament tomorrow? anna: this is parliament trying to take control of the process, at least. they certainly taken charge of tomorrow's timetable, and now have to try to come to some kind of coalescing around a way forward. what happens in the house tomorrow, it seems as if indicative votes will take place. not a particularly regular phenomenon here in the u.k. either. basically it seems to being everyone is given a piece of paper with a number of brexit options, including staying in the customs union, a second referendum of some sort, revoke

article 50, or even no deal. mp's get to say which one of those they would support. maybe you vote for a few. maybe you rank them. that is what one of the grandees of the conservative party has been proposing. mean that necessarily is what the government will then enact. the executive making it quite clear they won't take their instructions directly from parliament, although they are in the mood to listen and engage, we understand. it is possible that this whole process could just be used to dup intoip the erg and supporting theresa may's deal, which could come back later this week. francine: what do we do with this deal that theresa may negotiated with the eu? is it dead, or can it be revived? anna: it doesn't seem as if -- well, reports of its death are exaggerated. votes, both heavily

defeated, but less heavily defeated the third time. she does want to bring it back at some point. her conversations with the dup didn't seem to go well yesterday, accusing theresa may of scare tactics to try to get the northern irish party to support the conservative government. theresa may biding her time, trying to work behind the scenes to persuade others. over the weekend we saw the deputy immediate leader of the labour party speaking in favor dealpporting theresa may's if there were a confirmatory vote. she has said something that is not something she wants to consider. tom: there are many options. "the telegraph," a fabulous feature on the norway plus plan. there's canada, there's norway,

there's all the rest. is there any appetite for boldness, or is everything doing margin?vely at the some apologies, getting background noise from some passing traffic. certainly what we saw over the last 24 hours was really bold. it is not usual for parliament to try to seize control of the agenda in the way that we've seen, so that in itself is bold. whether we see bold assertiveness from the house will depend very much on whether they can coalesce around one option. there will be many options on this indicative vote paper. if all parliament does is stick to their preferred view, they won't coalesce around anything, and we might remain with big division, but there could be a majority for something in the house. maybe we will learn more about that. as i say, it is important to remember theresa may and the government have said they are not necessarily going to follow

lightly what parliament tells them they want because no executive, she says, can be bound to do something that they cannot know what it is. she cannot say she will do something in the future without knowing what it is. francine: thank you so much. bloombergds, our european market open. er.european market open chiefg us is blackrock's equity strategist. extensionr a longer the most likely at this point? poundlook at the relatively unchanged over the last week or so. if you take a deep breath and look back, this is exactly where we were on june 23, 2016. my view would be that the market is anticipating we get some kind of delay going forward.

eurosterling has been in the 10% , and ise last two years at the bottom of that range. this is a lot of noise come about at the end of the day we get a delay and a deal after that. francine: is the market biased? there seems to be a kind of paint of remain in the market taintind of -- a kind of of remain in the market. >> it has seemed that the contingency for no deal seems to be fairly low. we have no idea what parliament once, but we do have a clear idea that this parliament does not want the no deal hard brexit. we've now seen a bit of parliamentary power. , and ikets are betting would be betting, that this will prevail.

whatever there is, there will be isransition period, which great for markets in the economy, and there will not be this no deal hard brexit. comes after the transition is interesting, but not the major points. i really want to dive into the fixed income generation. two standard deviations we've seen over the last number of days. coming up, my discussion on brexit for the day. you know him from greece, but far more, his game theory and economics on brexit. we will do that in minutes. from london, from new york, this is bloomberg. ♪

tom: the backdrop lycee paris --

the elysees palace. the president of china meeting with the elite of europe. really an extra ordinary moment. francine: it is an extra ordinary moment coupled with real, hard cash. you have some deals on the sideline, trade deals and china finally committing to buy airbus es. iel with us of blackrock and holger schmieding of berenberg. what is the the importance of this to the many leaders of europe? >> the key importance is europe needs to find its own strategy toward china. we have a u.s. approach which seems to be somewhat confrontational. europe is not really used to strategicth big

questions, so this is an opportunity for some of the leaders of europe to start to discuss and make progress towards the european strategy. tom: scott t, the standard here is two deviations. australia with an abrupt move, and all of europe as well, a reaffirmation of negative yields. does it signal financial instability? the markets are keen on weak european data, and they are starting to question global growth. we are at about a 25 basis point fall in yields across markets the last couple of days of trading. that is really reflected in the market concern on the state of economic growth. they look at europe and see a slowdown. they look at the united states and see a slowdown, and they worry about china. we believe china will start to react seller to as some of the

tightening they have put through will come out to stimulate the economy and stabilize growth. but that, i really think, is the concern. we are going into a recession that market participants weren't talking about in 2019 or 2020. the concern is it is closer than we thought. francine: is there a danger that europe needs chinese money so badly that it will put other fights aside that they actually wanted to have with china? europe is not take into very bold decisions. a deliberate decision by all of the eu to take a specific, somewhat extreme approach, is highly unlikely. this will likely be the usual europe changing its strategy and steps. do not expect major results, but expect a movement towards europe having a more conscious approach

, discussing the issues, thinking hard about this belt and road initiative and what it means for southeastern european countries, and coordinating his strategy towards china a bit more than before. francine: scott, you have emmanuel macron, angela merkel, jean-claude juncker there. will they be talking about while way -- about huawei? they will.ing the u.s./china negotiations looked to be moving in a positive direction, but the u.s. is then going to turn its focus to the europeans. they've alluded to that. there may not be much to little -- much political support for that, but that is subtext here. the extent to which we see a cooperative europe/china relationship is an important balance to these other issues. tom: what is blackrock actually doing with sovereign fixed income right now?

scott: european rates are incredibly tough in terms of valuations. one of the things about european fixed income that is interesting is that the kerry is very high because funding rates are so low. the funding being very negative makes the carry of european rates attractive. we look at u.s. spread product and we see some really attractive opportunities. is ateld of the us ag 3%. if monetary policy is on hold and the economy in the u.s. is slowing, but still growing, and inflation is right at target, it seems pretty attractive from a yield perspective. for fixed income, particularly in the u.s., yield is king here. francine: thank you both, scott both, holger schmieding, staying with us. about up, we will talk german yields and italy, and of

course brexit. this is bloomberg. ♪

♪ "bloombergis is surveillance." buying --rming is confirming it is buying middle east rival careem. the deal will be uber's priciest ever, the first time the company

has bought one of its regional competitors. top qatari shareholders are concerned the possible deutsche wouldommerzbank merger add growing opposition. apple card comes with a rewards program on apple purchases. the push into credit is a major advancement for apple's payment services. that is the bloomberg business flash. francine: thank you so much. let's shift from gadgets to services -- let's stick with the apple story and its shift from gadgets to services. yesterday was full of celebrities, but the markets weren't really quite taken with it. were they disappointed, or is it just a market less lucrative

than what they've been doing so far? reporter: i think one of the issues we've had is the fact that there were a number of unanswered questions. with the apple tv plus service, for example, apple's push into original streaming content, we have no idea how much it is going to cost. it is a pretty established market with amazon and netflix, and this is new territory for apple. there are some questions as to how apple will pull this off. francine: what does it mean for net >> and amazon? could the -- mean for netflix and amazon? could the apple service be a come addition for them? -- a competition for them? apple's plans is to integrate with other providers, whereas netflix isn't. for every device that exists that supports apple's tv service, it also supports netflix. they will probably be quite couple of entry. you are editor for

moving the needle on apple. this is a great pie chart. the dominance of iphone, this is revenues, revenues, revenues. as you know, the blue over there is everything. it is not enough to move the needle, is it? nate: probably not, but at the end of the day, apple knows that was smartphone sales on the decline, it's got to move people towards recurring revenue, towards services. this is just another place for that. are you onme on, apple music or are you on spotify? nate: i'm on apple music. tom: oh ok, i'm impressed. don't they have come addition from spotify and the rest? -- have competition from spotify and the rest? nate: they do, but it is easy to

put that on the front page and say here's three months free when you buy an iphone. that works well for apple. it is one of the reason it's got its subscriptions to 50 million at this point. i just sigh service with a 24 bit resolution. every day your world gets more amazing. thank you very much. oprah winfrey will be with us tomorrow as well. francine, it was celebrity studded. francine: it was. in spielberg. tom: spielberg was there. coming up, another celebrity. this is must watch. varoufakis on brexit.

♪ tom: bloomberg "surveillance." francine lacqua in london, tom keene in new york.

your first word news, here is viviana hurtado. viviana: the u.k. parliament seized control of the brexit process from theresa may and will decide what happens next. the house of commons offered a series of votes for alternative strategies, potentially including one deal -- no deal, a customs union, or canceling brexit. michael avenatti has been prosecutorsederal are trying to extort millions of dollars from nike. he faces charges for embezzling money and defrauding a bank. fame representing stormy daniels. other noddy says he will fight the charges. jetus secured a $35 billion deal with china during xi jinping's trip to france. this deals a blow to boeing.

doubleal is almost touted by the president. emmanuel macron put the likely order at 18 million -- $18 billion. suspended school and work activities because of power outages after the information administer declared lights are coming back on after the second major power outage this month. the minister is blaming an regime forhe maduro the blackout. global news 24 hours a day on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am viviana hurtado. francine: thank you so much. let's go live to paris where we tadeo.ned by maria we are looking at the pictures. how much of the tough talk will

be on huawei? how much will be on trade, and of much is the president china trying to sign deals? maria: i would say it is a combination. macronhave president beam and today because of the airbus contract. he spent the whole day saying trade should be a two-way street . europe does not want to become a target for chinese companies. they want to gain access to the market. summit.this a mini e.u. the europeans are very concerned about china and they will describe it as a systemic rival to europe. language signals a shift when it comes to chinese money. francine: how much money are we talking about? maria: in terms of the airbus

deal, it was almost double the amount that emmanuel macron promised. the chinese are also sending a message to the u.s., everything that favors airbus is a blow to bowing. -- boeing. you they are tell concerned about some of the business practices and competing on a fair level, but also climate change and huawei. europe is about to roll out the 5g contract and it is worth a lot of money, but the allegations of cyber espionage by the chinese government. tom: maria tadeo in paris. an open question to get the conversation started, does the silk road extend to paris?

so to thedo not think extent it explains to other countries in africa. france, germany, these are self-confident trading companies -- countries and will not sign anything that could be seen as putting them under tutelage from beijing. they will certainly not sign a contract with conditions that are secret. i do not think this will be the end of the silk road. is speakinghatzker with lauren of black rock -- blackrock. does china need european finance? scott: it is all very connected. the idea that china is roughly 30% of world trade, the u.s. is about 10% on comparison. the relationship to train china

and europe especially as it relates to technology, it is incredibly important for the europeans. they are not about to make some bold steps. they are on a road to try to gain a relationship with china. that will be important from a trading perspective. francine: how do you see the u.s.-china relationship going? we hear things are making progress until things turn ugly again. holger: i do not think it will get ugly. both sides have a strong economic interest in keeping things diffused. economy needing a little extra help ahead of the election year next year, i think there will be a deal, however this is a strategic rivalry that will stay with us for many

decades, so there will be a deal that results but there will never be a deal between the two that resolves everything. scott: that is an incredibly important point. we are talking about a trade deal but there are lingering technology issues that are going to be with us for decades. francine: when you look at the underlying flashing red signals we see in bond prices, as it recessionary drills -- is it recessionary drills or not? scott: the european slowdown caught everyone by surprise and the ecb is concerned about that. we will see how that plays out. it may be a bit of an overreaction. the u.s. has priced in substantial easing over the next two years. putting in about 40 places points, that is a little bit extreme for where

we are, but clearly monetary policy is on hold and the market is trying to adjust to an additional hold. francine: is there a recessionary? holger: there is a recession risk but it is not so much economic. francine: 100% or 40%? holger: 10% i would say. hard brexit or if we get u.s.-chinese trade war instead of resolutions, that would push fragile confidence into recession territory. isthe economic side, there nothing to suggest we are heading into a recession. tom: i do not want to be rude to holger who works for a bank. how do they profit in the financial word we create -- world we created? scott: it is very challenging. one of the things we get the pushback on, on ecb policy or

japanese policy is that it is difficult for banks with the yield curve. longer borrowing rates being so low, it is difficult for banks to top rates. should we get a further downturn in europe, i do not think bond purchases is something we will see more further rate cuts. we will have to come up with something different and that may be fiscal spending. the rumors about potentially buying equity are unfounded, but this is an interesting and important topic for this year. i agree that we do not see recession in the near term, but if we get a further deceleration and growth -- in growth, because it is difficult for banks to cut rates even further. chart, and wethe

forget the carnage. this is deutsche bank and commerzbank normalized back to 2007. about all you can say is deutsche bank has done a little bit better. this is a huge 85% price erosion in these two giant banks. that has got to lead to mergers, doesn't it? i mean a consolidation of e.u. banking. scott: there is obviously pressure on these banks and earnings going forward on balance from the shape of the yield curve and the overall yield. there is extenuating circumstances with respect to these banks, but it is a difficult environment for banks from an equity perspective. francine: scott thiel and holger schmeiding stay with us. we will talk brexit and the economy of europe with yanis varoufakis. this is bloomberg.

♪

♪ viviana: this is bloomberg "surveillance." have climbed the most in almost eight months after plans to introduce two new models of the switch, one with enhanced features to cater to gamers. the other version is a cheaper alternative for casual players. they could come out as early as this summer. in ais buying korea and deal worth $3.1 billion -- careem in a deal worth $3.1 billion. it will be uber's price latest

deal -- raciest deal ever -- priciest deal ever. illegalim the company's marketing of the drug caused damage. they understated the risks and overstated the benefits of their drugs. the terms are not clear. tom: thank you so much. off our london desk, we are thrilled to have scott thiel and holger schmeiding. we will have young their focus at some point. i want to -- yanis their focus at some point. -- john s varoufakis at some point -- it is a wistful dream of brexiteers of a new united kingdom.

talking about a reformation back to the 17th century, great. how singapore can the united kingdom come -- become? holger: singapore is not exactly a democracy, to put it mildly. in the u.k., there is no political majority for a wholesale deregulation which brexiteers are dreaming of. the u.k. is an island off the coast of europe and it cannot help it, but it has made a trading partner within the continent. the e.u. will insist for trade between the e.u. and u.k., rules apply which the e.u. will have a bigger say. u.k. will have to forsake a significant amount of trade or continue to play by the rules. tom: as francine mentioned, moving toonsidering

the continent, frankfurt, paris, wherever, and the challenges of schools and that. are we at a point where the city is at risk of the indicative fanfare in parliament? scott: there is a point of no return. if you get close enough to the actual day with no deal, you cannot wait until the end date to put in place your contingency plans. i think a lot of this, the talk about moving people, etc., that is something that needs to be planned for but can be unwound pretty quickly. it gets a lot of media play and i'm not sure how significant it is. if you knew something was going to happen and had to make a contingency plan, you cannot wait until the day before to execute your plan. you have to execute it before. again, thislaying

has an impact of really making the management of that process difficult. moving the families and people, that is something that has to be put in place but can be unwound quickly. francine: will london change in the next 10 years? someoneulator asked for to be based in frankfurt, it takes at least a year to bring them back. scott: if you look at the tax revenue dollars, they can be significant. we are talking about high earning employees from a big number of financial institutions, their families, the taxes they pay, the revenue. the appeal to london is there and will remain there. the language and the tax system, the legal system, the theastructure, etc., but issue with coming right up to the deadline is you cannot wait

that long. francine: scott thiel and holger schmeiding both stay with us. investors atbal 7:00 a.m. new york, 11:00 a.m. london. this is bloomberg. ♪

tom: bloomberg "surveillance," francine the london, tom keene in new york. canlligent conversation, we do that with the former finance minister of greece. i can say yesterday in "the telegraph, your essay was extraordinary on one of the things you do best, game theory. let me bring up the quote. the key to finding a way out of the current brexit impasse is to focus on trading the space for a great debate. no majority exists for any brexit outcome. minimize thebe to

discontent by the most discontented and satisfying the more numerous middle ground who hold the least intense preferences. was that written in an ivory tower. can you affect what you wrote in parliament? yanis: it is -- the situation is very clear for all of us. this is not an academic observation. , itave a divided country divided parliament, and two major political parties that are also divided. there are not just divisions. icotomy, not a dichotomy. remainders.rd line having a second referendum would take time, which means britain would take part in the european

elections. imagine the discontent among the areas of britain where leave voters are out in force. then you have hard levers -- leavers who want to leave without any concern about the economic damage. then you have the majority of people who favor a soft, sensible brexit in the middle, but are not particularly vocal. we need to bring together those three different categories into a sensible debate. tom: within your game theory, do you need a labour party that is different from the presently constructed labour party? yanis: it will be very nice to have a different constructed conservative party appeared labor -- conservative party, aber party, and parliament, -- labour party, and parliament.

jeremy corbyn's position is sensible. he is proposing a customs union endlessld end this discussion about the irish backstop. it would keep british industry within the european union customs union so there would be no disruption to supply chains. my view is that it was a very evenly divided electorate back in 2016, only 1.8% separated the leavers from the remainders -- remainers. britain should stay in the customs union and the single periodfor an indefinite where they can debate what step to take. francine: it seems like

russell's was trying to be kind to the u.k. by extending so that there is no hard brexit. could they have done more or have they done enough? yanis: remember what kissinger said once? the problem i have with europe is i do not have a telephone number to call when i need to talk with them. there is not one e.u. position. german industry is panicking over a hard brexit. talkede: have they not with one voice? if you look at the position, they may want different things deal,ey seem, this is a you are not getting a different to ournd we stick position if the red lines are still in place. yanis: this is quite correct. they have had one former -- formal vos -- voice which they have speak and collectively but they have different rationales and consensus.

this voice is a recalcitrant one that says to london quite sensibly, you cannot have your cake and eat it. there has been no attempt by the european union to play an active role in finding a solution, and i understand why they have a problem. take the recent people's demonstration in the streets of london which was magnificent. try to speak to these pro-european union supporters to encourage them? edge swordouble because it may backfire. i understand the problem brussels has, but they are not helping particularly with its unified voice. francine: talk to me about greece, the current situation with the banks and bad loans. what will they do? yanis: we see what they have done. francine: the greek banks, how

can the lenders in greece address some of the problems with the nonperforming loans? yanis: they cannot do it, because when you are way under 50% of nonperforming loans, your asset books are over operating. there is very little you can do without destroying your capitalization and at the same time, making this worse. if you have a wave of foreclosures and auctions, that will depress the real estate market. the only solution is to create a publicly funded bank whereby you transferred the loans. francine: we need to leave it there been. this is bloomberg. ♪ so with xfinity mobile

i can customize each line for each family member? yup. and since it comes with your internet, you can switch wireless carriers, and save hundreds of dollars a year. are you pullin' my leg? nope. you sure you're not pullin' my leg? i think it's your dog. oh it's him. good call. get the data options you need, and still save hundreds of dollars. do you guys sell other dogs? now that's simple, easy, awesome.

customize each line by paying for data by the gig or get unlimited. and now get $250 back when you buy a new samsung galaxy. click, call, or visit a store today. ♪ this morning, the fear of global recession, the reality of

negative interest rates in germany and switzerland. david folkerts-landau in this hour. it is literally a palace coup. parliament seizes the brexit debate from the prime minister. anna edwards is life. after moller, it is simple -- democrats and republicans -- --ller, it is simple democrats and republicans regroup for 2020. i am tom keene, in a brexit shattered united kingdom is francine lacqua as well. i would love your take on the symbolism of paris. we are completely distracted in the united states live in moller--- mueller-thon. airbuse: hundreds of being bought by the chinese, the symbolism is quite fraught.

macron has to toe the line of being friendly with china and doing deals, but not getting to bank close -- too close with china unless there is a common e.u. policy. they need to navigate the difficulties surrounding huawei and 5g, and address ip'sderations regarding while still being friends. it is all the nuance. tom: interesting as the president of china greets three from europe. your first word news. viviana: president trump ally lindsey graham wants to look into barack obama's government in a new special counsel investigation and wants to know why they decided to open a probe into election meddling in 2016. was it just an excuse to spy on

the trump campaign? israel carrying out dozens of airstrikes across the gaza strip. attack in a home began the tents day. -- 10 stay. .-tense day this escalation could prove risky for prime minister benjamin netanyahu. he faces a tough reelection battle. or than a billion dollars of infrastructure may have been destroyed by a cyclone in southern africa. check out this damage. to the uniteding nations, the death toll more than 700. the cyclone damaging roads, bridges, and dams and has completely leveled more than 100,000 houses. seizing control of the brexit process from theresa may, it will have to decide what happens next. the house of commons scheduled a

vote on a series of alternative strategies potentially including , second a customs union referendum, or canceling brexit altogether. global news 24 hours a day on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am viviana hurtado. this is bloomberg. markets, one data stream for me today, not two. the vix, 15.95 on futures. dow futures up 109 points. the curve, not much dynamics, .uro and oil, not much going on maybe francine will look at a bout of new negative rates. francine: it is not much going on and i think markets are moving sideways today. european bonds are mixed, range bound. treasuries are falling a touch.

overall, european shares are gaining. we had news from the ecb that banks will find out what the tltro will look like. tom: it is great to have with us david folkerts-landau. mentions his contribution to academics and economics. once again, negative interest rates, what are the ramifications of this new bout of negative interest rates, to market participants? david: good morning. having 10 trillion of debt turning to negative rates, it is a historical anomaly. in 2000 years of history, we have not seen anything like it. it is very bad news for europe. in the sense that negative rates hurt the banking sector, they

that weand aura of fear do not know where to go from here on if things do not get better. if you are a midsized german company looking to make capital investments, you say to yourself, negative interest and i'm notangerous sure the people in charge of economic policy know what they are doing. -- you have a very scary connotation. tom: the scary connotation of the x-axis is where we are quarter after quarter, year after year of this agony. where are we on the time continuing of financial continuum of- financial instability? david: it is more grinding down toward the japanese model. in some ways, when you compare the ecb and the fed, the ecb

missed a turn. aggressively started increasing rates and it is now not back to normal, but has enough ammunition and looks secure. the ecb, now we are stuck with -40 in the depot rate and very little emanation left other than a concessionary tltro, or new qe. , itou look at the details looks very desperate in the sense that we do not really have a good set of tools to deal with any series -- serious downturn in europe. , theraises the concern lack of tools is dangerous. francine: when do you expect a downturn? we have had flashing signals from bond markets across the world. david: we have been among the more negative observers of european economic performance of the last couple of years.

we were not surprised by the german numbers, partly because we are reasonably close with our german clients and we see what they do. the european and german numbers do not come as a surprise. i would be surprised if germany did not end up with a negative number and the eurozone as a whole between zero and half a percentage point. it is not going to fall off a cliff, but it is a grinding down at a time when things should be looking good, given the monetary extension we see. it is more grind rather than a financial crisis issue. francine: if you think central banks around the world just do not have the tools left to deal with a significant downturn, what happens next? david: do not lump all central banks together in the same pot. the fed is well equipped and

incredibly well run. the same is not true of the ecb. missed a turn and does not have the ammunition to do a forceful intervention should that be necessary. the other central banks in the world, japan -- important, and deutsche bank has an extraordinary research report out about the future of european banking. you can get it from deutsche bank, not from francine lacqua. this is so important. we have the president of china being greeted by the anointed three in paris. life goes on. if we are doing this in a grinding negative rate environment, where will we see the stress? ,here will merkel, juncker macron see the stress? david: you raised half a dozen

seriously interesting issues. let me address the first one first, the banking paper. if you look at the numbers, anyone can see it is pretty obvious. european banks have been hurt by the negative interest rate policy in the share prices. if you look at the inception of , how it compares with the american banks, there is a 60% difference. european banks pay $8 billion in interest rate tax to the ecb. the american banks get 40 billion from the fed because they get the fed funds rate on reserve. that is a serious thing for the ecb. all the regulatory burdens, these are all good measures, but

the timing of it is devastating because it comes in a time when banks should have all the leeway to lend and lend discriminate way, but that is getting difficult. that is the issue on that side. what has to be really -- tickets step -- take a step back. the banking systems is the key driving force of the recovery. they allocate credit from old ,ndustries to new industries and these decisions are made within the lending process of the bank. if that does not work well, the bank cannot generate enough capital organically and does not have enough capital to write down nonperforming loans. you tend to lend to the old industries and that shows up a low productivity and low growth. thes a slow process, but taxes on the banking system and the lack of care about the european banking system, making

sure it works properly, is weighing on growth. francine: we will have a full roundup of the banks in a moment. coming up in this hour, ian shepherdson is coming up in about 20 minutes. we will be talking brexit, talking more about what david just said about the ecb and whether they have or do not have the tools to deal with the next downturn. this is bloomberg. ♪

francine: this is bloomberg tom and francine

from new york and london. asle revealing it is all in a services company at a star-studded event at its headquarters. include news and magazine subscriptions, and a credit card tied to apple pay's association with goldman sachs. withiginal video service steven spielberg, it is set to take on netflix. tom: this is the best graphic of the risk involved. five, maybe 6, 5 different projects. all the radar goes up when anybody at any time introduces five new things. that is really hard to execute. francine: you are absolutely right, although it did help having steven spielberg on stage. i do not know when the next test will be, one year or two years

and we are trying to figure out if it is a rival to amazon and netflix. tom: reese witherspoon was there so i watched "legally blonde" last night. francine: perfect. ,et's talk about brexit parliament has taken control from theresa may and well decide the course of brexit, leaving a number of options open including staying in the customs union or canceling brexit altogether. the votes are due to take place tomorrow. joining us now is anna edwards. good morning. for our international audience, does the prime minister have to follow whatever parliament decides? anna: no, is the straight answer. good morning. no, she does not. she has made the point that she does not want to take its orders

from the house of commons. pre-commit and will not precommit to do something when they do not know what that is. that would not be responsible, and they call for parliament to consider what is reasonable. we will see how the votes process unfolds. it will take lace tomorrow and some vote on the various message -- place tomorrow and some vote on the various messages, it gives the house control of the order papers for the next 24 hours and more of a way of expressing itself in the brexit process. tom: what will we see on the green couches in the house of commons? will it be chaos? will swordfights breakout? anna: i doubt swordfights, but certainly chaos as possible.

i caught up with one politics professor this morning who suggested that indicative vote is very impressive dented -- unprecedented and could lead to chaos. the divisions between the parties are no longer clear and the divisions and brexit that cut across the party, anything to do with brexit is becoming increasingly difficult. we heard from the leader of the european research group and he said something he said before, he said that backing theresa may's deal would be better than no brexit at all. he said he could see himself holding his nose and voting for theresa may's deal if the dup gets behind it. indicative votes might show a way forward or maybe a backward way to whip the dup and others in line, and getting theresa may's deal over the line. francine: anna edwards.

we are deck with david folkerts-landau of deutsche bank . it seems like it is more chaotic than usual and we are not sure what amendments parliament will the four and if options are real options. how do you see this developing? david: i would rather not comment on the parliamentary proceedings. the broader issues of what brexit will do are really quite muddled in the sense that we have for some time had the view that over the longer term, 3, 4, 5 years, the u.k. will do ok. it has an acceptable exchange rate, good international standing, and a lot of international contacts. it will spur the british in action and over five years u.k. will be fine, but it will be painful over 18 months to two

years. if they will take short-term pain for long-term gain, we have to respect that. tom: this goes back to your research and the work decades ago, you have always had a microeconomic foundation under your work. what are the microeconomics of the first weeks of trade and emigration and immigration with this brexit deal? what are the first couple of weeks that you perceive? at somee have looked detail at the various aspects across various sectors, and it depends on whether the european union is prepared to do special deals and make quick arrangements and patch things over. if they say, we will not do that, we have a major problem at harbors and airports and border crossings and licensing's. i suspect the european union will be reasonable and wise and

now say, brexit is done, let's make sure we do not have lots of immediate pain that will lead to long-term resentment on the part of the british. it is hard to predict what brussels will do, but it is my sense it will not be nearly as bad as people talk about. i think that is propaganda. in the end, reasonable men will sit around tables and find solutions to keep commerce flowing smoothly for a six month to one year period. have one million dollars of goods that do not pay tariffs coming over the border. tom: coming up on commodities and stronger gold prices, jeffrey currie of goldman sachs. this is bloomberg. ♪

♪ tom: it is a complex relationship, going back to charles de gaulle moving from taiwan to recognition of beijing half a century ago, and it has been fractious over the years. the leadership of france and china with chancellor merkel and mr. juncker. what is the symbolism of this moment? francine: it depends on which lens you pick up on.

from the e.u. side, we heard a lot of noise in brussels that they were not happy that france and italy were inviting givingnt xi to come and him a state pageantry to get deals because they thought it was the agreement of brussels to negotiate this relationship but it is complicated because it is in the middle of this u.s.-china trade war. they have to address human rights, ip theft, and security around 5g including huawei. tom: it is fascinating to ask the question which we can always four- where are these individuals in five years? this is merkel giving away from -- merkel moving away from leadership, but you wonder where they will be in five years. francine: you often bring up the longevity with the changes to

the people's national congress last year, that the president is in a more stable position than any european leader by far. tom: we have heard by some interviews that even the council on foreign relations is quite heated on the limitations mr. xi has within his new 2025 china. continuing to monitor our maria tadeo in paris. balance of power in the eleven hour, kevin-- 11:00 brady, republican of texas. ♪

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. all of you. how you live, what you love. that's what inspired us to create america's most advanced internet. internet that puts you in charge. that protects what's important. it handles everything, and reaches everywhere. this is beyond wifi, this is xfi. simple. easy. awesome. xfinity, the future of awesome. ♪ this is bloomberg "surveillance," tom and francine from london and new york. we are looking at president xi

and president macron in paris. let's get to the bloomberg first word news. viviana: federal prosecutors are charging high-profile lawyer michael of a not a for trying to extort millions of dollars -- michael aven body for trying to extort millions of dollars from nike. he gained fame as the lawyer from -- four stormy daniels. says he will fight the charges and is planning to hold a press conference. china,making a deal with the move dealing a fresh blow to boeing.- bowing -- to a developing story we have been monitoring, venezuela suspended school and work activities because of continuing power outages after the

information manager -- minister to clear the lights are coming back on. this is the second major power outage this month and they are -- ang this on a attack attack on the maduro regime. global news 24 hours a day on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am viviana hurtado. tom: thank you. much to talk about with david folkerts-landau of deutsche bank and ian shepherdson will join us. now, we digress to washington and kevin's a really. -- kevin cirilli. off themadness, this is college brackets of march isness witches down -- which 16 down to eight down to a final four. mueller andup on

going after the president, that is all fun and games. how long is the document, and do we have any clue what is in it? kevin: democrats are saying this has to be released sooner rather than later in order to get full and complete transparency. theiam barr will testify for a house judiciary subcommittee in the coming weeks. there is a lot of unanswered questions in terms of the purview that attorney general william barr had with regard to the special counsel mueller probe. tom: what is in the document, do we know? what is in it? francine: no, we don't -- kevin: no, we don't know stylistically how it is arranged and whatnot, but we have two large takeaways discussed by republicans and democrats, there was no evidence found of conspiracy between

trump administration officials and russian government liaisons. francine: the president seems to some kind oft payback against the evil enemies that started the mueller report. do we put it to one side, or can anything come out of it? kevin: what began as suggestions over the weekend have now elevated to senate judiciary committee chairman lindsey , a republican from south carolina and confidant of president trump, as saying they want to investigate the investigators. yesterday on capitol hill, senator graham said he would like to find someone "like a bob mueller" to look into how the investigation played out. strategists on both sides of the republicansrats and

for different reasons are suggesting that americans and voters might have investigation fatigue, especially as we head into the 2020 cycle. is such a crowded field and today there will be a forced line vote on the congress and senate with regard to the new deal, the democrats are having a moment of pause and saying, should we continue looking into these investigations or should we double down on policy initiatives? francine: talk to me about israel. president trump signed a declaration recognizing israeli sovereignty over golan heights. how controversial is this? kevin: not among the republicans, but it has become divisive among democrats. , which is anvened dominant israeli lobbyist group. netanyahu benjamin

appearing with president trump, making the formal announcement of the u.s. represented -- recognizing israeli sovereignty and the president having to cut his visit short due to escalating tensions between israelis and palestinians one-week before president netanyahu has an election. making note that none of the contendersential decided to attend that conference so domestically for the israeli prime minister, that has implications. in u.s. policy, except -- type of issue is developing in the democrat party. tom: with us are ian shepherdson and david folkerts-landau. the backdrop of this is the

global slowdown. we were talking about the negative interest rates in europe. what are the ramifications of all that upon the united states economy? ian: we are suffering from the same root cause slowdown that europe is, the downshift in china magnified by the trade war. tom: where does pantheon have us now? ian: 1% to 2%, but i think it will be just get better. the consumers are adjusting from the crazy pace last year with low gas prices. i think it gets worse before it gets better, but i do not think it will push the fed into easing which people are talking about after the dovish fed statement. there are real pressures, and i do not want to minimize what is happening now. i am concerned markets are being

myopic and focusing on the short-term dataflow and ignoring the big picture that china is easing aggressively. i think the u.s. consumer is in pretty good shake -- shape. in the middle of the year, we might be having a rethink when we see the sky has not fallen in and the cycle still has some life in it. francine: do you worry about deflation in china? david: not really. china has adequate tools to handle that and i do not think that is an issue. francine: do you worry about anything or do you assume that they have smart politicians and tools at their disposal to manage the economy? david: absolutely. byis 40% of the world's gdp 2022 and half the world's population with lots of money and capital. you buy yourself a few more air

buses and you have the french and germans and brussels rolling out the red carpet. a lot of influence they can acquire with that and they are using it skillfully. it is a dangerous game. that the mueller investigation clears and we move on. there is a big debate and upper, but we move on. will we have the same outcome with u.s.-china trade relations with some event that moves -- happens and we move on? ian: my base case is that we get a deal which does not fix the deficit. tom: we can just move on. ian: there is no world in which but weicit disappears deal with the most egregious problems. it does not matter. tom: what are the flows that you observe in and out of china in terms of investment and capital

markets? david: just a comment on what ian just said, i agree with that. this is a temporary bump and the u.s. will do fine. you should not underestimate the positive impact that trump's exoneration has. if you are an equity investor and the conversation is that the u.s. looks a lot better now. a very important risk has been removed, the risk of impeachment and all that entails. the risk of legal stuff is small fry. the u.s. looks a lot better than before and we are back to 2.5% to 3% growth. the same with the fed, i agree that i do not see the fed cutting at all. francine: how would you look at the inverted yield curve? ian: it is a brief anomaly. the fed gave markets and inch and the markets took an -- took

it and ran with it. this is not really the right move. i do not look at it as being an infallible recession symbol. the world is a lot more complicated. tom: a wonderful conversation, way too much optimism for me. ian shepherdson. ian: let's go back to europe. tom: absolutely. david folkerts-landau. optimism, you do that when you rollout oprah winfrey and delete -- reese witherspoon and others of hollywood. it was wonder -- wonderful yesterday in letting us know about the challenges of apple and apple services going forward. we will continue, stay with us. this is bloomberg. >> our vision for apple tv app

is to bring together your favorite shows, movies, sports, and news, and make them available on all of your devices , so you can spend less time looking for something to watch and more time enjoying it. ♪

viviana: this is bloomberg "surveillance." nintendo shares have climbed the most in almost eight months after "the wall street journal" announced plans to introduce new models of the switch. featureshave enhanced to cater to gamers and the other is a cheaper alternative for casual players. both will come out as early as this summer. cooper is buying dubai-based

rival careem in a deal worth $3.1 billion. priciestwill be uber's ever and will mark the first time the company has bought a regional competitor. that is the bloomberg business flash. francine: the french president emmanuel macron holding a press conference with european leaders, mr. jean claude juncker of the commission, and angela merkel of germany. he is together with the president of china. mr. macron has site to unite -- sought to unite the e.u. on how to deal with china. this is mr. macron saying he raised difficult issues such as human rights, but skeptical investors saying they are rolling out the red carpet and this all has to do with trade and deals. we will continue following that news conference, president xi

saying the world is in for a once in a century transformation. we back with david folkerts-landau and ian shepherdson. we were talking about this earlier about the fact that china is buying influence with money through deals. does it mean the fabric of the world, old allies will become new allies and the shift will be difficult to read? david: it is going to change. 10 years from now, you will not recognize it. it will be the u.s. and china. the u.s. does not have enough weight, military impact, and does have limited negotiation tables. trade relations around that. the issue that one needs to be aware of is whether the emergence of china in the pacific region will be peaceful.

stories that have been talked about, conflict when you have a new coming up eight out of 10 times leads to war. the question is whether these issues can get resolved peacefully, and that is an open question. in terms of trade, china and the u.s. both have a deep interest in resolving it right now. the only issue that is hard is the ip issue. is: graham allinson's book outstanding. this is the fear that is out there. united kingdom, five-year forward showing maybe a lack of disinflation. the united states and particularly europe, with this distress of the path from deflation to disinflation and

the need to reflate, where are we on that continuum? ian: different places, depending on where we sit because the structural differences are so big. the u.s. looks like it is reverting to something we might recognize as normal, now that it has a labor market generating wage pressures. tom: where are the markets? where is the courage for europe to clear the markets? ian: it is a logjam as it always has been and china is kicking the can down the road. a state run economy with a state run banking system, they can hide this for a long time but not forever. i am quite optimistic that all the talk of endless disinflation does not apply to the u.s.. i think we will be close to or at the target by the end of the year and we will see wage gains being sustained. moving back to something recognizably normal, while the

rest of the developed world is still struggling for quite a long time. francine: we are looking at live pictures of angela merkel next to the french president emmanuel macron. what will germany look like without angela merkel? are we underestimating the transformational shift with a lot of old leaders stepping down? the transformation is not necessarily economic on a same sort of scale. everyone has become comfortable with merkel, she has been around a long time, and we know how ideas. we will be looking at someone we have to reevaluate, but i do not see an enormous shift in german economic policy in the near term , or in the structure of the eurozone. the biggest cloud over europe remains the insanity of brexit but i hope this will be dealt with relatively quickly. tom: ian shepherdson, thank you

so much. david folkerts-landau on our london desk. up, ae much more coming busy morning, particularly in paris. this is bloomberg. i amu-china summit, and happy to see that china has reacted so positively. in september 2020, we will be organizing a full summit, all of the member states. ♪

♪ "surveillance," good morning to global wall street. francine lacqua with david folkerts-landau. pieceraordinary research harkens back to a thoughtful piece decades ago, and i would like to go to a piece of this for you to bring up the conversation with dfl. negative interest rates, and they have a punishment to them, the implementation of a new regulatory regime and failure to create a new home market archivists rating bank profitability. suffice to say, e.u. banks have

of their market value while u.s. banks have gained the same amount. certainly, he can speak to a larger banking system right now. how do we clear this mess? first needs to understand is in modern economies, the management intermediaries are key to making it work. they are not just there to take the positives of economics, but to allocate credit. banks are sick, economies do not do well. once you see that you get worried as you see the european banking sector compared to the u.s. is in dire straits on all metrics. european banks are a pale shadow compared to the americans. it is very difficult for them to make money to organically raise

capital, organically deal with nonperforming loans, and there is a history in the sense that americans restructured early after the crisis in europe did not. we have legacy issues in the banking system and this is a serious problem that affects fundamentally productivity. if you have to make loans under capital constraints, you stay with the borrowers where you have your money. you do not give it to new buyer wars -- borrowers because you write down the old money. all sorts of systems develop when you are not profitable so that is important. francine: what kind of banking system does europe need? david: it is pretty straightforward what has to be done, we need a unified banking system. only 1% of household loans come from across borders. as we talk about single markets 24 hours a day yet the borrowers in germany -- in italy do not

borrow from german banks, because there are so many issues going across borders. the completion of the capital markets union is the first thing that has to get done. it is so easy to do these things with monetary policy, but that is a very blunt tool to steer an economy when you are failing to do the more elementary and also harder stuff, completion of a single market. tom: david folkerts-landau, generous of you to be with us. he is with deutsche bank. we will drive forward the conversation through the day. anna edwards at westminster and kevin cirilli in washington monitoring those events. relatively quiet markets, but i think the lees a palace, these sees palace, these are

extraordinary. francine: i imagine they brought up the security of some of the five g networks like huawei. angela merkel saying minutes ago that stalled u.s.-china trade talks would have an impact on the e.u. because of the tariffs. it is interesting to have this sort of treo, there are four of them trying to figure out how their relationship can be better in the future. washing wonder, anyone -- watching in washington. this is bloomberg. ♪ this isn't just any moving day.

this is moving day with the best in-home wifi experience and millions of wifi hotspots to help you stay connected. and this is moving day with reliable service appointments in a two hour window so you're up and running in no time. show me decorating shows. this is staying connected with xfinity to make moving

simple. easy. awesome. stay connected with the best wifi experience and two-hour appointment windows. click, call or visit a store today. want more from your entejust say teach me more. into your xfinity voice remote to discover all sorts of tips and tricks in x1. can i find my wifi password? just ask. [ ding ] show me my wifi password. hey now! [ ding ] you can even troubleshoot, learn new voice commands and much more. clean my daughter's room. [ ding ] oh, it won't do that. welp, someone should. just say "teach me more" into your voice remote and see how you can have an even better x1 experience. simple. easy. awesome. ♪ alix: may loses control.

u.k. parliament takes control of brexit. yield curve debate. goldman sachs says recession --k is low, while others wo .thers warn it will weigh on welcome to "bloomberg daybreak." it is tuesday, march 26. i'm alix come along psy carol massar. -- i'm alix steel, alongside carol massar. francine: nice to be here. president xi jinping talking about in bracing the world at this point. alix: embracing the eu, really. [laughter] xi says the eu and china must cooperate. francine: