francine: brexit limbo. theresa may windsor hopes on their coalition, ahead of the au summit. the preparatory of. an extended delay. kirsten nelson is out. as has resigned president trump's frustration over the border boils over. speaking to been eurasia group regarding the sale of sabic. ♪

welcome to "bloomberg everyone.ce, good morning if you are watching from europe or the u.s. and even from asia. this is how your markets are doing. we have a little breaking news out of the turkish central bank. it is restarting. the turkish lira has had quite a bit of an impact over the last day or so. here are the markets. stoxx x 600, down .2%. a bit of a wait-and-see mode about the u.s. and china trade. looking at crude oil, currently at 63.34. of course, or arising in the last day or so after fighting in libya raised the risk of supply outages. the yen is also something good to look at as a currency market, 111.45. ed coming up, we have a

conversation with minnesota cranny and the saudi oil minister. will talk to him about libya as well. let's get first to the first word news in new york city would viviana hurtado. u.s. and china are closer to a deal, after high-level meetings in washington and the week before in beijing. despite optimism from larry trade reviewss. in a does say some issues are hard to crack. there is fighting on the outskirts of tripoli continuing. at least 35 people have been killed in clashes that is adding political instability to oil markets. saudi aramco plans to establish a "permanent presence in capital markets," according to the minister. this week the oil giant is preparing a $10 billion plus

bond offering. -- interest been up in the sale has been as high as $30 billion but the oil minister says it could be even higher. >> it is still dynamic. i think the books have not been close, but it is upward of those numbers. manus: north of 30 billion? .> i believe so the vienna: drivers of vehicles,tally -- will be charged money to enter the congestion zone. part of a push to counter omissions in the capital. 360 primaryeast schools and areas with a legal pollution levels. global news, 24 hours a day, on air and at tic-toc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i am viviana hurtado. this is bloomberg. back to you francine, in london. francine fish thank you. theresa may is standing by her

brexit strategy. she is hoping to restart her talks with labor leader jeremy corbyn while such a for a compromise to this week's e.u. summit. she defendedssage, her decision to take a cross approach. >> when you think about it, people didn't vote on party lines when it came to the brexit referendum. i think often that members of the public want to see politicians working together more often. francine: so, can she actually find a deal to avoid delaying brexit again. right now we are joined by kallum pickering and themos fiotakis. first of all, what are we talking about. is there any chance we could get something in the dense couple of days, and then there is the au summit on wednesday. would you think they would say yes to short delay or say no to a long delay? >> i think that is what we're talking about. postp ther new brexit

key issue for me from the u.k. may hasfirst, theresa remote the obstacle which would allow a long delay, which is the u.k. participating in the european elections. the question is whether parliament can find the majority ahead of the e.u. elections and the u.k. can get out of the e.u. quickly, or whether we head to a long delay. whether or not the e.u. says, you can have a short delay or you must take a long delay depends on what they can take to the e.u. on wednesday. tore are lots of incentives get this going quickly, but i thek the key risk here is best case, that the e.u. contras of a long delay, which are u.k. would begrudgingly accept -- counters with a long delay, which the u.k. would begrudgingly accept. francine: what does it mean for the pound? themos: i think by itself the

long delay is a punitive enough proposition to put on the table. but i think the market is overly focused on the very short term. and i think that. what the market is failing to see is that whether you get a long delay or whether you get a deal, and progress going forward, there is a lot of open wounds to be addressed in the next few quarters. the probability of elections is rising. new leaders potentially contesting the leadership of the tory party. a deal, thee is relationship with that you are for that is going to become very focal very quickly. the pond is trading as if the only thing is the rally after the deal -- the pound is trading as if the only thing is the rally after the deal. but if you look at the past few quarters, you may see that the complication of the process is creating more upside risk been downside risk here. francine: does it take the

no-deal brexit off the table? themos: the market is are you trading is this an no-deal table.is off the i think parliament as it stands today, stands ready to accept some kind of delay so that that doesn't happen. but that is today. it doesn't mean that is something that is a risk that eliminates itself completely. francine: are we too complacent? kallum: i don't think so. i think sterling is still undervalued. hard brexit would mean a selloff in sterling, a compromise could lead to a rallyp a compromise has to happen fast in case of a delay. if we have a longer delay, we start to build be extreme scenarios of either the u.k. staying within the e.u., or the u.k. going for a hard brexit with or without a change in

government. francine: why is in the market taking seriously the possibility of a no-deal brexit? because so far they have been right? kallum: there are two potential risks of a no-deal brexit. the e.u. could reject the uk's request for a delay this week. what we are essentially tried to figure out here for the hard brexit risk is whether or not parliament can actually bring itself around some majority soon. if it can, it may resort to a second referendum in order to resolve it. francine: you think that there is a deal that actually will get through parliament that theresa may could cobble together? kallum: let's be prone to big political assumptions -- there is a majority in parliament that once a compromise deal to avoid a hard brexit. let's call that the customs union. on that basis the government can deliver it and a jeremy corbyn would be the glue that binds the conservative party together. there is every incentive for

both theresa may and a jeremy corbyn to avoid a second referendum, because neither want the free movement of people, that would come with our remain. neither of them want a hard deal. . customs union so theresa may would have to resign for all conservatives to back at. francine: if there is a change in conservative leadership, themos, say boris johnson over, does that move the pound? are -- i think again, we the pound is thinking a lot about the next few weeks. if you think about it, if there is a change in leadership and a deal, then you are in front of the situation where you have in your leadership being more towards the exit -- towards .rexit than not let's not forget that while this deal is about the next two

years, it sets up the framework, but it doesn't ensure that you transition to a customs union with the e.u. afterwards. kevin: the process, the difficulty we in now, is that so long as parliament is willing, it can force a lot of terms on the prime minister. you change the leader of the conservative party and you don't change the calculus in parliament, any brexit leader, what they could do is either go for a big risk for the conservatives, or you could try to go with what parliament wants and shifts beyond brexit. keep in mind, most conservatives are still moderate. internalmmittee, the committee of executives would prefer a moderate as the leader. which means you could thetegically vote out o brexit years the runoff in the leadership election. francine: will be right back to talk more about brexit. both guests stay with us.

--next, the home is homeland security secretary is our. we discuss that, and politics. this is bloomberg. ♪

♪ francine: economics, finance, politics. this is bloomberg surveillance. london.cine lacqua in homeland security secretary is

out, apparently a casualty of president trump's frustration that the border issue is not being sold faster. bloomberg has learned that she was asked to resign. the president wants strong figures in charge of homeland security. the bloomberg senior editor for breaking news joins us now. eric, talk to us about her resignation. eric: it was a long time coming, frankly. the president had been up reportedly displeased with her job performance for quite some time and he is said to be extremely frustrated by how his plan to tighten u.s. immigration policy at the southern border is going. concern in the white house about the wall, that money is not being allocated, concerned that they are continued attempt for migrants to come across the southern border in an illegal fashion. kirstjen nielsen was seen as somebody who stepped in front of some of president trump's policies but didn't go quite as far as the president wanted. francine: what does this mean for immigration policy in the u.s.? eric: i think the president of

the united states is looking to continue what he wanted to do anyway. in fact, he might try to do it more. beenman miller, who has someone within the white house who has been very aggressively looking to tighten immigration policy is set to be ascendant, taking a larger role in immigration policy. so i would expect more of the same, more of the same faster frankly.r quite anyone who thinks hard to pressure will mean a substantial change away from what trump wanted to do anyways is very sadly mistaken. derek, thanks so much. now let's get the first business flash. >> warren buffett is wells fargo's largest shareholder. the ceo of wells fargo stepped down in march amid a range of

scandals impacting the bank. fiat chrysler is teaming up with tesla to comply with e.u. emissions rules. they have an option which allows automakers to a group of their fleet together to meet carbon dioxide targets. the company is reported to be paying tesla hundreds of millions for the deal. right now fiat is declining to comment. deutsche bank says. restructuring its u.s. investment bank is one of merger talks with commerzbank. the lender is "firmly committed to the u.s. outpost." bloomberg has learned that they are close to a potential tie up. they started formal merger negotiations last month. the dubai national bank is reportedly considering buying rival norbank, which would over $75lender with billion in assets. bloombergs your

business flash. francine: thank you. bloomberg'sn't miss exclusive conversation with five world leaders. president, vladimir putin, as well as the heads of state of norway, finland, iceland tomorrow at the arctic forum. coming up, payroll numbers i laid concerned that u.s. growth is headed to a ditch. we get into that conversation, next. this is bloomberg. ♪

♪

francine: mrs. is bloomberg surveillance. i am francine lacqua here in london. president trump's top economic adviser says the u.s. and china are closer and closer to a deal. larry kudlow says both sides will keep an content as a work --ough the remaining issues will keep in contact as they work through the remaining issues. >> we are closer than we have been before. a lot of difficult topics for the first time are on the table and being resolved. i think the talks have been productive. i think the president here, too expressed, i was in the room on thursday, guarded optimism, maybe more than guarded optimism. francine: president xi jinping. francine:, meanwhile, is reported to have called for an early conclusion to negotiations. what does this mean for the dollar and u.s. assets? >kallum pickering and themos you talk us are still with us.

president trump keeps on saying he's not happy with jay powell? kallum: the fed has played less and less of a role in the dollar. to the extent that these trade negotiations help spur a little bit of a growth rebound in china and via the trade channel into europe, i think there could be an important catalyst for a weaker dollar. that said, the high levels of carrie you know have in the dollar make it harder for the dollar to move productively. the dollar has a move, and it is unlikely to move until we see some firm evidence. francine: you think it will trade sideways from now? themos: for a little time, until you get stronger confirmation of better growth news, probably in the second half. i agree. the dollar news to be the

indicator of global risk on risk-off sentiment. if the risks go the right way over the course of this year, we don't get a major escalation of trade wars, possibly even a resolution, the industrial recession in europe and the emerging markets ends. you get a resolution on china growth stimulus and a brexit goes the right way, we should all become a little bit risk on towards the year and that should coincide with a weakening dollar. francine: is there a game jay powellen constantly threatens, does it make a difference to the dollar dynamics? kallum: i haven't brought the fed into the dollar equation for a while now. consider 2017 versus turning 18. in 2018 when the fed was tight and growth was strong, global economy was strong. we wanted none dollar assets of the provided a better return at a higher risk. in 2018, the u.s. story didn't

change. the fed continue to tighten and the u.s. was stronger because the rest of the global economy weakening. a good sign for the global economy improving may be a hawkish fed, which would coincide with weakness in the dollar something because the global economy is improving. francine: do you see these global recession cause being unwound? the market was positioned for something are great and now they are almost too optimistic in .ome cases themos: first of all, we leaned heavily against the recession calls, and i think that is being left out of the price. you are right. but the market isn't fully trading us if we are in a bonanza for growth. the bond market is trading very devilishly if i could say that dovishly. stronger agony markets are reflecting the markets thinking that growth will be low and

moderate and inflation will be low. there are two risks do that. a risk to the upside, which i subscribe to, is that the bond market will wake up and see the equity market is right and will need a correction from expensive bond levels. view.s my the risk here is that we wake up and see as the economy remains, the growth of the economy globally remains in balance, we wake up and see that the u.s. is doing its own thing, growing at its own pace, while the rest of the world is not taking up. it is a risk to where we have been arguing against the dollar. a stronger dollar is bad for sentiment globally at this stage. francine: the big question on our markets live blog, is the market complacent about the u.s.-china -- and e.u. china trade war? kallum: what i would say is that markets will take their cues

from u.s.-china trade wars in almost every negotiation. if china and the u.s. goes well, probably the worst of the fears about a potential global trade skirmish will fade and anything else we could probably live with, including the noise. francine: thank you both for joining us, themos fiotakis and kallum pickering. both stay with us. chunk ofe is buying a a spanish well refinery from abu dhabi's sovereign wealth fund. we speak to the ceo of petrochemicals next. this is bloomberg.

♪ francine: this is bloomberg surveillance. i am francine lacqua in london. let's get to the first word news viviana hurtado. >> theresa may warns that the

.k. may never leave the e.u. that it would be like purgatory. fighting on the outskirts of tripoli as libya's government says it will start a counter attack against south libyan national army. the military operation has been dubbed a volcano of anger. at least 35 people have been killed in clashes since wednesday. this escalates the standoff of the opec nations that is adding political geo-stability to oil markets. president trump or permit asked kirstjen nielsen to resign on concern that border issues weren't being sold faster. she has been a lightning rod for criticism over the trump administrations dealing with a

border crisis. last week the president threatened to close the u.s. border with mexico. move by benjamin netanyahu coming before the national elections seems aimed at the right wing voters he needs in order to secure his fifth term in office. he faces a tight race against a chief.army the u.k. is said to crack down on social media companies like facebook. they could face a statutory duty to protect users against harmful content or face heavy fines. the government is making a push for an industry funded regulator. it would enforce rules on removing images that encourage terrorism and abuse. global news, 24 hours a day, on air and at tic-toc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i am viviana hurtado. this is bloomberg. much.ne: thank you so

abu dhabi is selling another chunk of its sovereign wealth fund assets. carlyle group has agreed to by oureen 30 and 40% of spanish oil refiner at around $12 billion. the deal comes six must after plans to lift a quarter of the company was scrapped. joining me for an exclusive interview is musabbeh al kaabi, chief executive of petroleum and petrochemical is at mubadala, abu dhabi's sovereign wealth fund. thank you for joining us on bloomberg surveillance, and congratulations on the deal. did you get as much as you wanted, was it negotiated hard enough? mussbbeh: we are very pleased to have reached the agreement with carlisle for them to acquire 30% or 40% of cepsa. it is the largest privately owned oil and gas company that is integrated in spain. and we are very glad to have a partner like carlisle be part of in cepsa.ing

francine: what does this partnership need for investment and for how you see the future in this space? mussbbeh: i think in mode -- in mubadala, we are an active investor with $226 billion of assets under management. active in 15 different sectors including the portland oiland metric of calls -- and gas and petrochemicals. carlyle is well known in the oil and gas and energy space, and we think their capabilities will complement our capabilities and drive the next wave of growth and the next strategy for the company going forward. as an institution we have a deeper understanding of the sector itself, so we believe in the future where all sorts of

energy will be required including oil and gas and as an institution, we are active in the full integrated value chain of energy including renewable energy. francine: i was going to ask you about renewable energy and what a lot of investors get right forget wrong. we will keep on talking about the end of big oil possibly in years.5 do you think that is pessimistic? do you think there will always be a role for big oil? most of the fish as mentioned earlier, institutional dust the believes that all sorts of energy will be required, that is way mubadala is active in oil and gas, active in renewable energy, active in the renewable space. it is interesting to see the energy going forward. but today we are talking about

cepsa and as a mentioned earlier,'s upset is the largest -- and cepsa is the largest integrated oil and gas company positioned downstream, where they have a strong position in refining, almost a half $1 million of oil a day. in the upstream, they have a low-cost valley including here -- low-cost portfolio including here in abu dhabi. they recently expanded into the renewable energy. so we think all sources of energy will be required in the future. francine: i wanted to ask you whether you share the concerns of other energy experts about not enough investment in the sector. bucks the trend, what does that mean for how big subset can become compared to some of their rivals -- how big cepsa can become compared to some of their rivals?

musabbeh: i think one concern the industry has to deal with is lack of investment. we talked about the future of energy mix. if you project 20 years from now, there are different under all but these scenarios, there will be a massive requirement for investment in this space to fulfill the future demand for energy. with cepsa, we have set a very clear strategy that they need to be in a low-cost environment, resilient to any future oil or commodity prices going forward. we see a transition in the energy space from heavily apending on oil and gas to more noble energy coming in the future -- more renewable energy coming in the future. that is why cepsa is invested in all these energies. for joiningank you

us, chief executive of petroleum and petrochemicals at mubadala, and congratulations t on the deal. tomorrow we have a conversation with president putin as well as the leaders of norway, sweden, finland and iceland, at the arctic forum in st. petersburg tomorrow at noon, london time. this is bloomberg. ♪

♪ francine: this is bloomberg surveillance. i am francine lacqua in london. business to the flash with viviana hurtado. franco-stockto the exchange, this increases chances at this company will win

approval for its $490 million takeover bid. they will make a final decision over whether to grant euro next bores.ion to buy oslo made -- boeing slashed to 42 airplanes a month by mid april. the aim is to reduce spending on the planes and preserve cash. fiat chrysler is teaming up with tesla to comply with rules.issions this allows lawmakers to a group fleets together to meet carbon targets. the financial report says the company is paying tesla hundreds of millions of euros for the deal. fargo buffett says wells should look beyond wall street for its new chief executive according to the financial

times. the billionaire berkshire hathaway chairman is the bank's shareholder. wells fargo ceo tim sloan you may remember, stepped down in march and made a range of scandals impacting the bank. buffett says he backed sloan 100%. that is the bloomberg business flash. francine: thank you so much. the hype is building around this year's most hotly anticipated bond sale. saudi aramco chairman says the demand for the auction has a ready past $30 billion. androadshow wraps up today, the oil minister spoke to bloomberg's manus cranny at the forum.rabia energy >> the roadshow is ongoing. i think the deal will close wednesday, so i am advised not to comment on it. reportsink the press and the analysts, and the

investors have been extremely impressed by what they have seen. this is not a surprise to us. we have been saying it for years not onlyi aramco is the largest but the best quality company that exist on the planet. and i say that from every angle, not just in terms of resources. that the company has access to. but also its environmental stewardship. also its technological prowess in terms of indigenous technologies that it provides, safety andse, it's human resources. this is a company operated by saudi's, owned by saudi's, and governed by predominantly saudi board that has always taken the right decisions. the valley is out there for the world to see. i think we have to think beyond bonds. they will -- we hope that the

closing of the deal with sabic -- manus: if the sun is successful, -- if this deal is successful, and we are all speculative how successful will be, will he come back to the bond market again? alid: we will establish a presence on the market that will have both debt and a capital instrument. i can assure you that you will have your choice in a couple of years between investing your savings from working for bloomberg, in either aramco, aramco shares, or commercial paper. aramco as the world's largest company, obviously, is going to have all the tools at its disposal to access capital markets. i think in terms of paying the deal, it ise sabic going. again, the prospectus for the

shares, it is not the primary reason. the only reason for accessing the bond market. it is a tool that the company needs to have, and we need to level up and just add some debt instruments on our balance sheet. manus: and it establishes a very clear yield curve so to speak. sports, who ise right, was a 26 billion dollars demanded or $30 billion? what the world was to know, where is the bulk of the demand? 26 billion, or 30 billion? is still dynamic there we books have not been closed, but it is upwards of both numbers. i am not part of the roadshow, my -- it is healthy, let's put it this way. behink you should just

patient, wait a couple of days come by wednesday, we will all know. francine: that was khalid minister.saudi oil he was speaking to manus cranny of saudi arabia energy forum in riyadh. kallum pickering and them with your are still with us -- tell -- pickering kallum pickering and themos fiotakis are still with us. kallum: if we have generally weak demand, which we do have in some parts of the world, that could be a problem. looking at oil from an economics point of view, at this stage i would prefer it the cheaper the better, certainly for places like europe, which doesn't have a big oil sector and is still relying on consumer domestic demand to keep growth alive. in the u.s. it is a slightly different story. you have a big oil sector, shifts in the oil price simply

transfer in comes around. higher oil prices cuts out consumers and means higher oil investors. so if oil starts to rise north of $70 a barrel and environment where europe is relying on domestic demand to keep growth of flows, i would worry. themos: there are two angles. the first is effect of oil on inflation. with how volatile it has been other not volatile other components of efficient have been, oil and other commodity swings have played a large part in a inflation surprises in the last few years. in the market has traded those. we are now trading in a disinflationary period, and we could see the efficient headline go down globally as well. there are other thing that is more important, it is linked, which is very important, if you

withat how oil correlates inflation expectations, medium-term inflation expectations in a number of nations, it makes you wonder whether within a context of low inflation expectations, a strong dollar, the oil price has been affected by those factors as well. that there is a spiral most from expectations into actual inflation, which the policymakers to be aware of in the years ahead. francine: let me bring you to charts, asavorite her try to explore whether europe is becoming more like japan with demographics and also with the pressure we saw on wages. this is what we're trying to figure out. when will bund yields drop below japan? they may drop below soon, but there are different that i mix in those markets with bunds, you have falling supplies as a german government reduces its debt stock. you don't have that in japan. have a believable see bund yields start to rise in the next

two years as some of the global risks weighing on european growth fade, and probably japan's situation will not , where you have the disinflation, the link between the central bank and the issue is of government debt. dip, pattern expected to last longer, i expect the spread to increase as european growth improves. francine: this is basically the .waps moving lower, in europe themos: this is the wrong price for me. expensive. i think it is not hard to make an argument that bunds need to be close to 40 or 50 basis points, substantially higher from here. and it would actually come from the long and. why is it the wrong price? if you compare to japan, for instance, one thing you need to see is that real rates in europe are deeply negative still. in japan, they are actually not

negative. inflation expected since are a lot lower than in europe. in fact, european eels are at this level as they were back in are at european heels this level as they were back in 2016 but expectations of lower.on are the ecb is also closer to normalization than it was in 2015 and 2016, and the market has actually moved away from rising normalization. so going even further, having some discussions around further discussionse of this , precautionary discussion for policy ahead, i think the market is getting it wrong here. francine: thank you both. i have another great european chart. clark.thanks to hillary themos fiotakis, kallum pickering, both stay with us.

for next, we take a look at some of the movers in today's session, including fiat, as it announces its deal with tesla. we also look at that concerns in italy. this is bloomberg. ♪ himhim

♪ francine: economics, finance and politics. this is bloomberg surveillance. let's get to your movers, with annmarie hordern. ismarie: fears chrysler higher as we learned there are teaming up with tesla to combat rules.r e.u. admission market regulators are saying that they are suitable owners of oslo stock exchange. is lower this morning under some pressure, on the wake boeing cutting production of 737 jetliners by 19%. safran is a big supplier. .om: francine: thank you. there are reports that italy will use a contingency fund of 2 billion euros to ensure that its structural -- is met, amid lower output. europe has been struggling with

a low growth environment causing more challenges for mario draghi and the ecb. themos fiotakis and kallum us.ering are still with themos, let us look at some of the borrowing costs from europe. stoxx, andne is euro the second one is the berkeley euroaggregate -- barclays aggregate yield. themos: this chart you're stocks me here is that are cheap. it tells you valuation, which. are strategist have made. . number two, the ecb is less strong than other banks, so they effective. they can buy a whole host of marketable assets here including equities. they can even get more inventive if they want to.

they have more powerful tools particularly when it comes to bank balance sheets, the direct pockets of financing for the european economy. they can actually target those. them in question for central banks globally is, what is the threshold they don't want to cross is additionally? a have seen out -- the main question is what the threshold they don't want to cross institutionally. ?rancine: kallum kallum: the ecb has done a good job lowering expectation for rates, but you don't see a good hearted impulse in the eurozone economy. there is not much the ecb can do. the upside for the ecb is actually don't have a major debt problem in europe on either the public or private side, so the argument that they have to lower interest rates a lot is not as strong as say in the u.s. or you

probably have a debt problem which needs to be cured with rates.t the downside is that when you are at a situation where long-term economic growth is low, completely unrelated to monetary factors, what you need is a big shock to the system in big policy stimulus, a big announcement. the ecb, even though it is not constrained, has political obstacles. it may react slower than it needs to to contain the crisis. francine: thank you both for joining us. us -- there attack must be attack us -- thank you to both my guests. we will talk about politics coming up next. coming up next. so with xfinity mobile

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customize each line by paying for data by the gig or get unlimited. and now get $100 back when you buy a new lg. click, call, or visit a store today. brexit limbo. it theresa may looks for a cross party compromise.

but can the prime minister escape a permanent or extended delay? asstjen nielsen is out president trump's frustration over the southern border boils over. and the saudi investment fund may look to exit some of its investments. we have been speaking exclusively. good morning. good afternoon if you're watching from asia. york.ene is back in new i hope you had safe travels. maybe it give you time to think about the week ahead. it is not only the imf world meetings, the world bank with meetings and the possibility of a recession looming. but we need to look at brexit and the deadline a friday. -- of friday. tom: that quality home video we saw over the weekend. extraordinary about

davos is the screaming need to fix eu banking. i will let you decide. unicredit, maybe someone else is in there as well with commerzbank. francine: focusing on the need for consolidation. let's get straight to the bloomberg first word news. na: a lightning rod for criticism over immigration policy is leaving the trump administration. homeland security secretary kirstjen nielsen was asked to resign. strong lawnt wants a enforcement type figure in charge of the department. he is said to be frustrated the border issue is not being solved faster. the prime minister is restarting brexit talks with her chief rival. theresa may defended her decision to work with labor party leader jeremy corbyn. she says without his support, the you can may never leave the european union.

she tried to come up with a plan this week at an eu summit. trump's economic adviser says the u.s. and china are closing in on a trade deal. larry kudlow says the negotiators will be doing a lot of teleconferencing after two weeks of talks. are a tough nut to crack. mike pompeo warns a bolivian warlord to halt his advance. he moved the so-called libyan national army to the outskirts of the capital. libya says its forces will counterattack. news on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. check with currencies, bonds, currencies and commodities right now. check your screen to set up your

monday. ,or equities grinding higher oil elevated. showing the bull market still under. crude a major global price for european oil. francine, lira and the argentinian peso creeping up. francine: that is an important one we are keeping an eye on. european stocks are pretty much trading sideways as they are trying to figure out the latest in the u.s.-china trade. stocks drifting. bonds are drifting as well. we look at oil. you can see oil at 63.34. that is american oil. abouts are pretty cool the deadline but there is a summit on wednesday.

i think it is a little bit more uncertainty that may be markets get credit for. tom: let's go to the bloomberg and show you the eu banking structure. interview after interview was a demand for a merger. commerzbank in yellow, deutsche bank in blue, unicredit in red. deutsche bank actually doing better, unicredit as well and then they all give it up 14 months ago to this mess down here. absolutely stunning. way below the veil after the so-called lehman moment. talking about europe and whether it is becoming more like japan. the most common comparison is the borrowed cost convergence theeen japan and between

yield spread. this is my chart and we're trying to figure out at what point both yields would drop below japan. for more on the markets, we're joined by john norman from jpmorgan. have one of the stories on the bloomberg terminal, congratulations on this terrific note where you look at correlations for warnings. the first one which caught my attention is a bunch of credit spreads versus equities. what do they tell us now? mr. norman: there is cyclical optimism which is why equity prices have been going up. the d correlation that one needs to watch for is the possibility that spreads move wider in some parts of credit and the equity markets might press higher. some people might take that as a warning signal. but it depends on what is causing it. a prophet slow down,

that could be a lead indicator. if it is supply driven, more m&a activity like it would be in the second half of the year, then this is not something to worry about. i will try tone: get them up in the second, but talk to us about some of the other divergences. is rare that diem currencies would be going down versus the dollar. usually these move together versus the u.s. dollar and it is around a common set of circumstances outside the u.s. those seeing a currency weakness , this is mainly europe and also the antiquity. there is something that you are going on in europe and something odd going on in australia and new zealand. banks have much lower policy rates.

it eases off. tom: i want to go to the chart and it is good to see your on the same page as a guy named dimon. that helps the resume as well. the view is a really important and dense read. the idea of an upgrade in china. the zeitgeist right now is that this is a hard landing on chinese gdp growth. you have a real sustaining gdp above 6%. will that be the great call of this year? mr. norman: i wouldn't call it a great call. we are looking for a minor upgrading growth. think it is better than you get with a lot of other countries and that is why if you are taking country allocation, why you would want that versus fixed income. i don't think this will be the

trade of the year. this be happening with e.m. assets. is probably not worth another 5% or 6%. it is not the kind of returns that people might associate with chinese economic upturn. tom: it is priced into the markets, you are saying. a they follow jpmorgan to level that you are in a slight react?, how will markets mr. norman: if you guide a half a point upgrade, i think they could easily be worth another 5% minimum on global equities. because they do price in some global growth. there's still something to play for if we do get more out of the global economy in h2. hilary clark did it

for me but we call this the norman chart. this is the correlation of u.s. stocks in the age widespread. -- hy spread. mr. norman: there have been divergences between the two and supply, that is fine, but if it is profit then it is not fine. francine: coming up, we will talk more about banks and get our guest away in some -- to weigh in on some market correlations. this is bloomberg. ♪

is surveillance, let's get to the bloomberg business flash. a prime minister theresa may's government is proposing a new industry funded watchdog. the regulator would enforce rules on removing online content that encourages terrorism. face heavy fines and individual managers could be held liable. set week, saudi aramco was for a mega debt deal. they are preparing to kick off what could be a $10 billion bond offering. saudi arabia demanded three times that amount. it is hugely important for banks, hoping to run a future aramco ipo. the largest lender in the united arab emirates has its sights set on arrival. wouldbai islamic bank create a lender with $75 billion in assets.

it is undergoing a wave of consolidation. that is the bloomberg -- bloomberg business flash. francine: the italian deputy says it is not him, it is the person on his left speaking right now, saying to broaden thed eu dream before the elections in may. what he's trying to do is basically a rally cry for people to vote against the eu or for parties that are not that supportive to the eu. he's also head of the anti-immigration party speaking during this event in malan. -- in milan. we will keep an eye on that. that ties into brexit. theresa may is standing by her latest strategy. she is open to restart deadlocked talks with jeremy corbyn.

she searches for compromise ahead of the eu summit. may defended her decision to take across party approach. may: people do not vote on party lines when it came to the brexit referendum. i think that members of the public want to see their politicians working together more often. francine: theresa may asked for an extension and the bloc could insist on a much longer delay. the managing director of europe. it john norman is still with us. thank you for your sticking around or coming on. i don't know how to look at brexit. we are none the wiser for what exactly will happen. but we know there is almost no chance of a no deal brexit. >> i think that is right. there is no appetite for a crash out on the 13th of april.

the debate will be between a short versus a longer extension. think a long extension is still slightly more likely. francine: what does a long extension look like? how many more attachments will they ask? doesn't mean we are back to square one? tom: take a look at what is happening in london. take a look at what is happening in london. can they converge on substance? i amcared local -- skeptical to see if they can find something to agree to. ,either of those tracks deliver then you are looking at theresa may turning on wednesday and arguing that there is a process in place and requires more time.

and europe having to come to a decision if it is in their interest for a few more months or for a longer time. there will be a number of political conditions attached to that. tom: have you seen any compromise yet? mr. rahman: i think they are talking about a customs union or a customs arrangement. this is something that theresa may has been trying to force through. divergence.ll it is unclear if labor will seek a referendum. of thisnts as much agreement to limit the ability of the new prime minister in parliament to upend the agreement. this is a challenging bar for the prime minister to meet which is why i am skeptical. me, what was interesting to and i put it out on twitter.

the last person in the universe to join twitter is with us. look for that. but charles, moreover on the telegraph, he's writing in a brexit dial and all that. a beautiful summation of all this foolishness. right in the middle, you had those regions of the united kingdom. say that still most of the united kingdom was to leave? is that a correct statement? mr. rahman: we see different data, tom. there is an argument to be made that if there were another referendum, it would lean to remain but the shift would not be substantial. you would have all the divisions if u.k. were to remain a member state with divisions unresolved. there is a lot of competing data out there about which way a vote would go. bothis why leaders of parties are skeptical about committing to a referendum.

where does this leave the markets, john? mr. norman: side winding and moving randomly from day-to-day. prospect of a longer extension my provide a little clarity on the brexit process, that will be over the next few months. what would be the composition of the next parliament? it is difficult to handicap with the odds are that the u.k. does something with this longer and negotiating timeline. tom: is april still a big deal? no, i think a lot of the decision-making will happen on wednesday at the european council. ishink the risk of no deal basically zero. the big discussion on wednesday

is whether it is a short or long extension. it enables the u.k. to go through a fair amount of political change. and in a general election later in the year. -- and then a general election later in the year. francine: think you both for coming. stay with us. at the digital and culture secretary at 7:30 a.m. in new york, 12:30 p.m. in london. this is bloomberg. ♪

wax we are closer than we ever have been before. a lot of very difficult topics. the first time, they are on the table and being resolved. i think that is terribly important. forink the president expressing that i was in the room thursday with guarded optimism and maybe more than guarded optimism. tom: say what you will, free trader lawrence kudlow on face the nation. john norman with us. i kid about trump lateral trade with -- which is a trade policy that we continue to learn about. what is trump lateral trade? mercantilismind of or something else the president is trying to do on trade? mr. rahman: i don't think anybody knows. senior officials are still very confused.

when we do know is a big concern about the economic cycle in europe. but the concern about where germany is. the europeans are looking for somewhat constructive discussions with the u.s. because we are very concerned about what is happening to the cycle here. francine: what does it mean for the markets? is a deal priced in? mr. norman: i think a deal to open goods are caught up to where global growth is right now. i don't think the possibility of tariffs being lowered by the u.s. in exchange for chinese compliance is the price. i think that is what people have to focus on. is the president going to give some indication in a short time period that tariffs could be lowered on china in exchange for their delivery on some promises. if that happens, i think you see earnings upgrades coming through in a think you see growth upgrades coming through. i think that is the potential

catalyst for financial markets. say the u.s.'s china trade war is over or it is on hold. we going to see a china-eu war or a u.s.-eu more? -- war? it's not the difference between the europeans and the trump administration. the europeans are probably willing to have this discussion contexth more measured than the trump administration. you will not see the europeans imposing tariffs on china like the u.s. did. this becomes an issue for the indefinite future. for avenue the kind of thing that is a tax on americans? tariffsdiscussions of in china, aren't they tariffs in nebraska and california?

mr. rahman: like any tax, it harms the welfare of the and the consumers. it is a myth to say this is a americans. the it will have an impact on employment. strategy been a costly , but the u.s. is growing at 3%, but now it is growing at 2%. so it cost 1% of gdp growth. up, balance of power. you know him. the former u.s. attorney. stay with us. this is bloomberg. ♪

francine: this is bloomberg surveillance, thomas francine from london and new york. let's get straight to viviana.

tom.na: ciao, francine and kirstjen nielsen is out, a casualty of president trump's frustration with the border. he says it has been broken for many years. the president wants a strong law enforcement type figure in charge of homeland security. president trump's acting chief of staff about the democrats will never see the president's tax returns. mick mulvaney calling the request for returns a political stunt. a lawyer asked the irs not to respond to the democrats. he was the u.s. justice department's opinion on whether the request is legal. , prime minister benjamin netanyahu has to have a clear path of victory. , but the is trailing right-wing coalition is favored to win a majority of seats.

the billionaire founder of the world's largest hedge fund says he is worried about losing the american dream. bridgewater associates cochair ray dalio appeared on cbs 60 minutes and said capitalism is not producing enough opportunities for most americans. >> if i was president of the united states, when i would do is recognize that this is a national emergency. viviana: 24 hours of news powered by 2700 journalists in more than 120 countries. francine: in italy, there is a contingency fund to ensure the structural deficit is actually met according to italy. this is according to economic output and tax revenue. europe has been struggling with a low growth environment. london, chief in executive of outer breeze

investments. program.o the what kind of growth do we need right now? now on big data, we see growth is actually negative. it will be -.02% gdp. and by the year-end, you will not see a positive number. is that thereason entrepreneur class has been lost. because they have been unwound in order to basically give shortened cash for the european elections. listeningwe were just a couple of minutes ago to the deputy prime minister, the on this coalition of government who lashed out at the european union saying it wasn't doing enough for their citizens. and even the train corporate the

and even betraying core principles. mr. rahman: there are looking to increase his party's representation in european looking to form not a formal coalition but to tagteam european parliament. the institutional cycle will start. he is looking to implement a big agenda. and demonstrate consistently the broadly european opinion. tom: what is the power italy has? why does germany, the netherlands, and finland care about italy right now? can they just ignore it? of rahman: a number structural things and play.

it is a big problem. in brussels, they expect the deficit to be 4% next year. so there will be a big review on the target. finding it inconceivable that the government will be able to meet that target. if you later that on top of a situation, financial they are looking to pull the plug on this coalition. we think the risks will increase. it will be a very comfortable partner for the league. saudi may decide to maintain the coalition for some time. it is accruing have a tremendous amount. his ratings are through the roof. it is a right-wing coalition. and very quickly, going on in germany, we have a slow and painful transition with merkel.

looking to consolidate her position on the right, she's not doing that particularly well. so is losing broader support there is a set of questions around fiscal policy and the transition in berlin. and lay her on top of that changes on the ecb, the brexit question. it just makes us somewhat concerned about the overall trajectory of europe in the second half of this year. tom: there is nothing like living there. i enjoy the working class climbs of lake como. how is the separation of northern and southern italy going given this revolution in italian politics? mr. serra: the separation has happened over the last 40 or 50 years. most of the private capital has been invested in the north.

if you take longer, it is as productive as bavaria. and the south has seen public-sector state employees. dismal.as been very the league is strong in the north. it is basically a populist party trying to get more in the south. francine: what does that mean for markets? should we expect yields to go high because of this nervousness? because of really elections? or is this the way italian politics go? mr. norman: italian politics is very awkward whether it is in italy or another part of europe. it is a flashpoint for markets. but this is a slightly more benign issue in the sense that the success and government is

the right of center coalition so i'm not sure there is much space to be using fiscal policy. there were lessons learned last summer. so it might seem like there is more authority in the fiscal policy but i'm not sure they're going to go that far. that is a reason you may have more volatility around both parliamentary elections in the eu and in italy. a doomsdaye this is type of scenario. francine: thank you for joining us. -- mr. serra will stay with us. bloomberg sits down with president putin as well as the presidents of norway, sweden, iceland, and finland in st. petersburg tomorrow at new london time. this is bloomberg. ♪

tom: good morning, everyone. french and look what and london. i'm tom keene. onant to thank everyone queen victoria street for a really successful week. and it was extraordinary. can tell you that a trophy should begin out to francine for longest thaw. francine: it was cold but it was fun. we spoke to a lot of academics and had some thought-provoking conversations. it was a really wonderful summit. in the backdrop of the summit was let's fix eu banking.

john from jpmorgan will step lightly over the seam of let's fix eu banking. with this we are thrilled this , a true expert on eu banking. statisticalsingle observation and eu banking that maybe not in the zeitgeist right now. what is the ratio that matters? numbers thate matter the most is probably the number of banking institutions. the eu has the highest number of banks. we are talking about 28,000 institutions. you take the top five banks in europe and the u.s., and you .ave almost 50% in europe

the banks are not large enough. tom: not only do you look at the financial parts, but you look at the human condition. these parts red -- do not represent shareholders. is that true? bank, commerzbank, whatever -- are they not representing shareholders? mr. serra: yes and no. right now, 70% to 80% of large european banks are on the institution shareholders. 30% are not voting. it is mimicking the index and that is a problem. they are making a point because the majority has basically advocated that role in the u.s.. francine: do you own any share in commerzbank?

mr. serra: we do not. but we do own some of the credit. if a merge, it will be very positive for the credit. andill basically be a recap it would be positive for credit. i know we were talking about about it last week, but does it make sense? this is the only way that you can really cut costs because of the unions and because of the labor laws. but then deutsche bank is also dealing with u.s. investment arms. i don't know how that fits into the conversation. mr. serra: i think there are three. under german labor laws, you can't get a massive redundancy package. secondly, if you look at commerzbank and deutsche bank, deutsche bank is 90,000 people. if you add contractors, you almost have 100,000 with the revenue base of 20 billion euro.

so the issue is deutsche bank just has too many employees for the revenue base. secondly, inside germany, commerzbank has 50,000 employees. but an asset base is one quarter. the tools will strengthen and that will enable cross cutting. it will do nothing to the international operation of deutsche bank. as a result, you probably need to be looking at 30,000 or 40,000 employees with a combined cost base. they have to go. it's a huge number. right now, on a standalone basis, our favorite is unicredit and bnp. tom: that is sort of a retail skew there as well. you mentioned 50% which, for most americans, is unimaginable. who controls the politics of germany, the politics of austria, the politics of italy?

is at the small bank lobby, the middle bank lobby? or is there a conduit right to political leaders? who holds that power right now? in europe, if you say banking, it is fat. it is centered around banks of money. across europe. it is as simple as that. and germany, 70% of the bond market is state-owned. they hold the true power. in the strongest lobby group france, the combination of the two are one that can basically make laws. the larger banks together, they are basically in the doghouse. francine: in the doghouse. ra, stay with us. accrued oil extends its gains,

lifting prices. there is no need for the kingdom to deepen cuts. thee do want to stabilize market and keep them stable. i think we are getting to a stage where inventories are starting to stabilize and come theybut there is still -- are still significantly above what i would consider to be a normal level. last i checked, it was 70 million barrels to 80 million barrels. ♪

viviana: surveillance, let's get to the business flash. looking outside for a ceo, berkshire hathaway the largest shareholder in wells fargo. he tells the financial times the hiring of a wall street banker will lead to criticism from congress. due month, tim sloan quit to a range of scandals impacting the banks. theipo price range below pinterest company's valuation, the online image search company begins a roadshow to pitch shares to investors. ins on the schulz there's 2017, the company was valued at

roughly $12 billion. -- the last time they pitched shares in 2017, the company was valued at roughly $12 billion. carlos ghosn is in a tokyo jail accused of numerous financial crimes after being free on bail for almost one month. he was rearrested last week. that is the bloomberg business flash. francine? oil markets are healthy, eliminating the need for saudi arabia to increase production cuts. the energy minister spoke exclusively to bloomberg at the saudior arabia energy forum. one point 2 million was based on other countries keeping their october level production. i think we have to watch them. you know who i am talking about. venezuela still leads to find out what happens. u.s., theyith the

have waived in november. they will be up for reconsideration. allof these environment -- of these will impact fundamentals. ellenton certain things from demand, supply, and u.s. production. the longer we wait and the closer we are to june, the more informed our decision is. that is why we thought april was premature. certainly there was a desire by some not to make a decision. we acknowledge that this will probably be gun jumping, so to speak. we will decide what july is going to look like. in may, it is only a few weeks away. come back closer to june and hopefully it will be more clear on where we need to grow. tom: very good. a conversation on oil.

with us is john norman as we drive forward this discussion. the idea of the correlation of oil with a u.s. dollar, you have a statistic, the number of times that they discuss it right now. it is cocktail talk across wall street. is there a general link between oil and the u.s. dollar? mr. norman: i think there is next to none. they like to talk about it, but when you think about what really drives the oil market, it is so much more about the policy decisions influencing supply. that relation could be positive or negative on any given day. i would not look at it as a signal for anything. i would want to know if the trump administration would be putting pressure on opec to ease supply cuts to contain the crisis if the output goes down again. tom: is that in the price? i think this is one reason why most people feel like oil is in range and the reason

why energy equities have not fully moved up in line with the rise of oil prices. there is skepticism that the price above $70 a barrel could be sustained because you can see policy response it independently by opec or by response to the press. francine: i want to move to emerging markets. the central bank unwinding some of the support measures actually hit the currency as well as president erdogan basically calling for a probe into istanbul. it highlights ongoing political uncertainty around turkish assets. this comes at a time when oil prices are higher so it is a double negative for currency. it is tough to see the currency going up over the next few months. francine: overall, what is your take on emerging markets? it is linked to the dollar but you have stories including turkey? mr. norman: i only have a

country specific view on em. the block wide view is probably inappropriate. currenciesike is oil . i also like latin currencies for the yield. i think they could benefit uniquely from bond related inflows as assets move into benchmark indices. it is pressured by low interest rates, and i think it is generally pressured by higher oil prices. but do you see it touching seven or is that a thing of the past? mr. norman: i don't think that will happen unless the fed is back in play. maybe 2020 if the fed gets inflation and resuming the fed hikes, you can resume the dollar back above seven. for the rest of the year, it is in the five range. tom: the turkish lira, this is convexity.

this acceleration is particularly important against the log wide access showing a percentage change. and showslegant chart persistent convexity. is there an inertial force right now to lira weakness? think the inertia is mainly given by interest rates. even though the chart is compelling, it tells you you want to own the turkish lira. adjustedthink about terms, it is not clear to me that there will be a move to go forward but that is the important point to keep in mind. you have a risk premium to keep in mind for the interest rates if the spot is moving. tom: i will go with that, but we had a headline come across the the screen, 24% interest rate in turkey. a nation compete with a 24% interest rate? mr. norman: it's not an interest

rate that will deliver an improvement in growth. i think expectations at some point, there will be enough political stability that interest rate can come down and it will sponsor some kind of improvement in the economy. if interest rates stay where they are, it will be hard to stick with it. tom: thank you for the briefing and for your attendance today. forthanks to davide serra that important discussion on eu banking. we will drive forward the conversation as a guest joins us from citigroup to talk about april, the dynamics into 2019. and we will look at washington. stay with us. this is bloomberg. ♪ the biggest week in television is back!

xfinity watchathon week. now through april 14, enjoy free access to the best shows and movies from hbo, showtime, epix and more. what! so, you can get more into what you're into. whether it's more laughs, oops. epic escapes, or high-flying thrills, get more into what you're into.

just say "watchathon" into your x1 voice remote, or download the xfinity stream app. xfinity watchathon week, free. now through april 14. tom: this morning, "our country is full of an ever-increasing

acting cabinet," as president ousts the secretary. isis the my highway -- it the my way or the highway presidency. britain is full of brexit. a casual video from missus may today. more meetings from missus corbin. .ay to berlin banking -- it is in full crisis. fix it now. in morning, everyone. this is "bloomberg surveillance," live from our world headquarters in new york and our world headquarters in london. francine lacqua, what did we learn from embers eddie? francine: we are quite worried about the tools of the central bank going forward. the tone was more optimistic about world growth, may be more pessimistic about some of the european countries. we talked a lot about banking and the need to clear the market. tom: nice summary. i would emphasize, the immediacy

,f fixing global banking particularly e.u. banking, front and center. here is viviana hurtado. viviana: a lightning rod for criticism over immigration policy is leaving the trump administration. bloomberg has learned online security secretary kirstjen nielsen was asked to resign. the president is said to want a strong law enforcement type figure in charge of the department he is said to be frustrated with a border and a system that has been broken for many years. the british prime minister is hoping to restart brexit talks through chief rival. over the weekend, theresa may defended her decision to work with labour party leader jeremy corbyn. she says without his support, the u.k. may never leave the european union. may is trying to come up with a plan she can sell this week at an e.u. summit. president trump's top economic adviser says the u.s. and china are closing in on a trade deal. larry kudlow said this week

negotiators will be doing a lot of teleconferencing after two weeks of talks. china's official says the remaining issues are "hard nuts to crack." in turkey, the lira is falling after comments from president erdogan, who is urging the country's election board to investigate vote stealing. the opposition party says they one. -- they won. i am viviana hurtado. this is bloomberg. tom: thanks so much per equities, bonds, currencies, commodities. a reset on a monday, a little bit of weakness in equities, what a week last week, grinding higher on equities. the euro stable, 112.39. oil elevated. there is the dow. what a shock. to percentage or so below the record highs. stable, 1.1239.

oil elevated. there is the doubt. what a shock. the percentage or so behind -- below the record highs. francine? francine: what i am looking at is overall european stocks kind of slipping before they were edging sideways. today i think a lot of it will be on the trade deal between america and china, and the prospect of that is continuing to drag. risinging, despite the risk of supply shortages. the pound is always nice to look at, especially when there is a deadline on friday. 1.3057.see the pound at tom: i want to go to this double barrel headline that we have, prime minister may meeting with mr. macron. off the lehman low, normalized the three-bank -- unicredit, deutsche bank, and commerzbank.

errico --backdrop for for miracle in may, and before that, lacroix in may as well. francine: talking about dynamics, we have been trying to figure out if there is a real basis that europe becomes like japan. this is one of the great questions that are markets log is trying to figure out. one of the most common comparisons between the e.u. in -- e.u. and japan is the bund in germany and japanese bond yields. you can see there is a borrowing cost convergence between the two countries, as noted by the 10-year yield spread. tom: if you have nothing better to do today, they be go to wikipedia and actually read about kirstjen nielsen, the former secretary of immigration in the united states. it is a next ordinary set of accomplishments. she is out the door. with a historic perspective is

jim hurriedly. jim, acting secretary of defense, acting secretary of immigration, acting this and acting that. what is the view from the london desk? it is an acting presidency? jim: it is very hard to judge from london because what we do 24-hourhere is the firehose of fox news, which seems to be what drives a lot of president trump's reactions and policies. tom: i would agree with that. being in london, you really see the difference in the media approach, particularly with the warring newspapers in london versus what we have in america. jim, what will you watch for this week? do you have to circle back trade and the incredible importance of the president coming out with a victory there? from the point of view of the global economy, striking a trade deal with china is

probably the most important development. but again, political interference with the fed is also a gigantic unknown, depending on how much he wants to -- how he goes down that road with the various individuals who he has floated or named. developmentsen the in the last 48 hours, what happens to the border? jim: it makes it clear that his eye is on the 2020 election. his eye is not really on the border, his eye is only on the border to the extent it placed his base. he talks about going in a tougher direction. not he is saying is he is interested in practical solutions but in ways that his recently departed -- as kirstjen nielsen pointed out, a lot of his policies could not be

implemented because they violate the law. tom: joining us now as we look the head of fx analysis at citigroup global. goinge some people i am to say outliers looking for dollar stability, or even dollar strength. you go the other way, don't you? >> we think for now the dollar is in a strong position. there are two corner storms -- ,orner storms -- cornerstones that the dollar is the high-yield are in the g10 world. the other is that despite all the noise we have seen, the u.s. economy is doing comparatively well. it change?en does what is so interesting is the opacity of calls after labor day this year. it is incredible, the mystery of what is out there.

ebrahim: the market for this year is what the trajectory will be for china. china is incredibly important for the global growth direction, and it is critical for the dollar trajectory as well. what we expect to happen in the second half of the year is confirmation of stabilization in chinese growth, that therefore allows global and in particular european interest rates to may lift a little bit from their recent lows, and that that could be a more meaningful had wayne -- headwind to the dollar this year. francine: overall, what are the chances we get a trade deal between the u.s. and china that holds? are, like most of the market, optimistic that we can see a trade deal between the u.s. and china, that at least the major negative fallout for the rest of this presidential term has a voice. -- the rest of this presidential term is avoided.

that is one of the three major pillars of why we think the global growth environment this year turns for the better. a supportive central bank in the u.s. we have a gradual confirmation that the chinese course is bottoming. francine: is there a concern that actually once the -- thatna trade deal there will be an e.u.-china trade concern, and that that will impact europe? ebrahim: there certainly is concerned, and we get a lot of questions on that specific issue. one concern is that once the u.s. is done with china, they will turn on the e.u. 232e is still the section investigation that is global, but it is important for the e.u. and japan. the other is that may be the u.s.-china deal itself could be problematic for europe if we say every direction of u.s. demand away from europe toward china.

overall, we think that even concern,ere is some they were not -- they will not be major factors. europe continues to be very sensitive to global growth. tom: we will talk trade and em in the next block. john normand was just on with jp morgan. you are on with citigroup, even us two deep research capabilities. i like the way you put it -- there are green bamboo shoots and china as well. that is not consensus right now, is it? ebrahim: i think it is going to be. if we look around markets as being increasing signs that optimism about china is clearly taking off, it has been a little quiet with commodities of late, but in the last two weeks, as we started to see march data bouncing back, i think there is clearly optimism coming back when it comes to china. this will be another week when

that will be evident in the data. francine: thank you so much. -- abrahamaa ray rabaa ray -- bloomberg sits down with president putin as well as the president of norway. iceland, atand, and the arctic forum in seen bridget berg -- in st. petersburg. this is bloomberg. ♪

this is "bloomberg surveillance." the u.k. has cracked down on facebook and other social media. government is proposing a new industry funded watchdog. the regulator would enforce rules on removing online content

that encourages terrorism and child abuse. companies could face heavy fines. managers could be held liable. aramco is set for a meggitt that deal. the state owned oil company -- for a mega debt deal. saudi arabia passat energy minister says demand is three times the amount. energy minister says the demand is three times the amount. the biggest islamic vendor in the united arab emirates -- this'll make bank may buy more banks, creating a lender with $75 billion in assets. the middle east financial service industry is undergoing a wave of consolidation. that is your bloomberg business flash. tom? francine? francine: thank you so much, viviana. we are getting a check on voting shares premarket. they are down three to 3.5% this morning.

for the first time since the september 11 attacks, boeing said it will cut out around 19% or around 42 planes a month by mid april. this is in order to cut spending on the program and preserve cash after all of those crashes and investigations into the 737 max. --: abraham rabaa ray ebrahim rahbari is with us. how about an ugly chart. let's go to the chart right now on dollar index. what is so important this morning, the smooth moving averages -- over here is where indexes cut through, the greenline just slams through the pink line, and over here, we are home on the range. and we have gotten up and going and we are flatlining on the moving averages. how boring is boring?

how do you make money, or just as importantly, how do you not lose money given how boring things are? the markets of late have not been boring at all. we have plenty of excitement around what is happening in bond markets and of course the strong rebound in equity markets as well. i think when it comes to making money for the rest of this year, it is popping out whether we are seeing economic data in terms of rebound in global growth, which would be supportive for a currency, cyclical occurrences in g10 that cyclical currencies in g10. it probably includes the euro as well. orb whether we basically -- or whether we anticipated a rebound in china and global growth, in which case we are much better off being defensive. tom: all of this chit chat -- what does it mean for the

president in terms of the trade deficit? it is better em economy, imports into us as well, isn't it? ebrahim: absolutely. at this stage, we have no indication that the deficit is about to start reducing again. part of that is good news. we are looking at a u.s. economy that continues to be solid. domestic demand -- broadly speaking, there are no signs of major weakness. i think the trade balance is mainly a macroeconomic phenomenon. we do not think that there are meaningful changes on the trade policy side that will make a big dent to the trade deficit. perhaps we do not see further increases in the trade deficit widening, but we do not see any turnaround in the deficit. at best, perhaps there could be bilateral changes. china is the most important in that context. francine: thank you so much,

ebrahim rahbari there. we are getting breaking out of pinterest. we have all used it, of course, on our tablets or phones. pinterest setting an ipo at 75 million shares, valued at about 15 to $17 -- $15 to $17 a share. interest, the ipo for -- for pinterest. we will talk about ipo's globally. this is bloomberg. ♪

francine: this is "bloomberg surveillance," from london and new york. theresa may is standing by her legs it asher latest brexit strategy. -- her latest brexit strategy. may is set to ask europe for an extension to the brexit process to june 30, but the block could exist on a much longer delay. joining us now is our guest from new york. from citi. rahbari because parliament has taken back control, is it kind of we care but there is not that kind of cliffhanger? thehe first thing to say is april 12 deadline holds unless the european union's when he seven other members agree to a longer extension. that is the first big question that hopefully we will get an

answer to this week. then we have theresa may's proposition. what we saw this weekend was a change of tone. she is no longer repeating the mantra, we are going to get control of our laws and our border. she is saying now there is some version of my deal or there is no brexit. that is the first time i have hurt her put it in binary terms like that. what she means by no brexit, that is the question. is she talking about revoking article 50? she is putting that to parliament, putting that out to the british people. that has been a change from her. francine: what would change in the immediate future? do we need a longer extension so there is some form of brexit that gets voted on? e.u. is going to have to evaluate theresa may's request for a longer extension, and they will have to make a decision on whether these talks between may and jeremy corbyn will be productive.

from the e.u.'s perspective, they quite like these talks. they have been saying for ages that the very size of the debate should be getting together. i think they are going to want to give them a chance. the other thing the e.u. is keen to do is avoid blame. they do not want to push britain out the door into one scenario or another. it is a balancing act. emmanuel macron, the french leader and other leaders, are reluctant to see britain participating in the european parliamentary elections. all of the toxicity and contentiousness that that is going to bring. tom: let's go to a quote from ms. raphael. weak. looks increasingly there was a moment called peak europe. one divorce but

two. the second between the two opposing sides in the referendum will be better and faster for years. onyou need 27 people to get the same page in europe. what is the likelihood of that? therese: i think the likelihood short-term is that they will be on the same page again to avoid taking the blame for no deal. what i was trying to convey in that column today is that in some sense we are focusing on the wrong divorce. we are looking at this prospect of a long extension or softer brexit, thinking for the markets that is a good thing. what we may be seeing is the beginning of a massive betrayal narrative from those who wanted a harder brexit, and a battle that really has not played out in british politics in the conservative party. that could be very debilitating. tom: may goes out the door, it is assumed. can we be us -- can it be assumed that this trick corbyn

will go out the door? therese: some people are assuming boris johnson will be the next prime minister. i think a corbyn government is no longer an outlier scenario. --t is part of this whole all of the calculations being made right now. francine: thank you so much, to rest raphael. -- therese raphael. and we will have more. coming up, jeremy wright, that is at 7:30 am in new york, 12: 30 p.m. in london. we will have more of the corporate movers, including boeing. we will look at your markets and yields. this is bloomberg. ♪

when you think about it, people did not vote on party lines and it came to the -- when it came to the brexit

referendum. often members of the public want to see their representatives work together more often. francine: that was theresa may. we are getting breaking news out of a theresa may spokesperson saying the prime minister will speak to other u.k. leaders there are aims former brexit talks with labor as wealth or let's get to market functions and market relax and -- market reaction. at what ween we look know on brexit and what we do not know, which is a larger part of the saga, what does it mean for level c echo ebrahim: we still remain constructive on the basic logic. we think there is a lot -- a sizable risk premium in sterling, and we will be able to avoid negative outcomes, including in the short-term, no deal, but perhaps even the risk

of a general election maybe slightly. the other is that the pound is offering some degree of value. it is relatively cheap, and global investors are significantly underweight in u.k. assets. we think where we stand, probably the upside is dominant when it comes to sterling. this week is clearly going to be another where the sterling outlook is heavily riven with noise. we have uncertainty with how the e.u. will deal with a u.k. extension request, which at this stage seems to be based on little except asking for more time. we remain sterling constructive, but there needs to be tolerance for volatility, and maybe this moment is not one that i would go to invest. francine: what would be the best outcome for markets by friday? we have an e.u. leader summit.

you markets favor a long extension? ebrahim: absolutely. in the ideal scenario we somehow have the breakthrough in the direction of a resolution. the pivot back to a male -- two a may deal looks unlikely. i think the realistic best case scenario for markets is a long extension so that we can get breathing room for markets, maybe a little bit for the economy, may be the bank of england. tom: we go right into the bank of england as well. one of the most amazing things with my time in london last week was that king and carney were not on the same page. what does that mean for the central bank? expand on that. ebrahim: the bank of england had been fairly confident on the economic outlook toward normalizing policy. but it has been held back by two factors -- one is ongoing brexit uncertainty, but now that seems to be slowing the economy down sharply. window,ve a long enough

maybe the bank of england can spring back into action and we could see them hike again this year. for the time being, markets are pricing cuts. that is because everything is going in the other direction. tom: right now, your first word news in new york city with viviana hurtado. viviana: kirstjen nielsen is out. she is apparently a casualty of president trump's frustration with the border and system. bloomberg learning that she was asked to resign or the president is said to want a strong law enforcement type figure in charge of home and security. bloomberg has learned president trump is preparing a novel campaign strategy. he will be touting his environmental credentials. officials are putting together talking points on what they see as environmental success stories, including cleaner air and reduction in missions. the president, you may remember, pulled the u.s. out of the climate change accord. he also suggested that wind

turbines cause cancer. prime minister regimen that yahoo! clears to have a -- prime minister benjamin netanyahu clears to have a clear chance at victory. the right-wing coalition is favored to win a majority of seats. the billionaire founder of the world's largest hedge fund says he is worried about losing the american dream. bridgewater associates cochairman appearing on "60 minutes," saying capitalism is not producing enough opportunities for most americans. >> if i was the president of the united states -- it has to come from the top -- i would recognize that this is a national emergency. viviana: global news 24 hours a day on air and at tictoc on twitter, powered by more than 2700 turn lists and -- journalists and analysts in 27 countries. tom: it is time to get it

lyrical junkie update. you withilled to have us. i want to go to a wall street journal op-ed. intro.fect this is on what you think is coming, folks. it is not the same. ms.will be likelier to find harris at the california in-n-out burger. that is where you would find me. the number of delegates awarded in super tuesday has nearly doubled. a -- candidates could win iowa or new hampshire. their small best case, winning is everything. it worked for barack obama and hillary clinton. it is not going to work this time. >> two big stories come in my opinion. number one, california has moved up its primary.

it is one of the first ones. kamala harris is going to win there easily. she comes out of california with the most delegates in the early part of the primary. the other story i find fascinating is all of this focus on joe biden's inappropriate touching and all of that has overlooked the fact that he has not put a staff together. he does not have economic advisers. he does not have the political expertise on his campaign. he is far behind the tom: other candidates. tom:within the observation -- tom: within the observation, is texas a purple state? greg: maybe. i think the democrats have a chance to win there. i am not sure about the next election. tom: what are you sure about? we are talking about the primaries. ohio, florida, the usual seven states -- is it the same, or is it different? greg: a lot of the states are

the same. pennsylvania is huge. the democrats could flip it. they could flip michigan or wisconsin. but i have to tell you, in the last month, trump's chances of getting reelected have been proved a lot. collusioner saying no , that is a lot. the economy is snapping back after a miserable winter. tom: francine, i needed to do this because i needed a fix of american politics after the insanity you and i witnessed last week in london. francine: greg, i guess when you focus on, for example, what the president wants, is he going to get what he has asked for in the u.s.-china trade agreement? greg: i think people take on almost anything he wants a deal, once the markets to be happy. there will be a deal. i would have been -- i have been saying it comes later rather than sooner. there will be one he will get

quite a bit of credit for. this economy can easily grow at point -- attwo 2.5%. thingne: what is the one the markets misunderstand about the president? greg: they probably misunderstand the fact that he has no real advisors, just a handful. his only advisor is himself. he rejects the advice of people around him. i think the perception of chaos we saw overnight with kirstjen nielsen leaving will persist. he has no one that he listens to. tom: well said. i think we all understand that, whatever our political affiliation. can you explain to me the ramification, for the american viewers and listeners of this ?how, what "acting" means acting defense secretary, immigrationetary -- secretary? translate that. greg: it leads to the perception

that there is no strong leader. i would argue that steven mnuchin is a strong leader. by and large in this administration, there is not the depth of a staff. maybe there is an acting secretary, but beneath him or her, you have a wide range of vacancies. that will preclude them from getting a lot done on a lot of issues. there is not a lot of action. you so much.ank coming up on balance of power, we will drive forward the conversation leaking wealth and finance with politics. stay with us. this is bloomberg. ♪

francine: this is "bloomberg surveillance. tom and francine from london and new york. tom is looking at his pinterest or. tom: i don't get it. lot.ine: i use it a i use it a lot for the kids and the tweets. it is quite good if you look at the evaluations. it is below what they are expecting, but it goes to the tech usage. in the future, you can take notes may be for work. here is what you should be looking out for this week. the chinese premier travels to bless souls -- to brussels for the e.u. summit. if benjamin netanyahu wins, he will become the country's longest-serving leader. discussion ona the article 50 process. on the same day, the fed releases minutes from its march meeting.

thursday, india begins elections with results due may 23. will backthe imf meetings that you and i will attend. single besto to chart. this is a twisted chart. i just discovered this this morning. this is the first time you are seeing it. rahbari with us from citigroup. this is the data of the tariffs of the united states government. all you need to know is it is a really good series across three decades. out onerahbari, standard deviation, 2, 3 is normal. we are out four after five or six standard deviations. it is an explosion of tariffs. is it an explosion of our viewers and listeners over to the united states treasury? ebrahim: this is a clear confirmation we are looking at a major break in u.s. trade policy.

this has been leading to a major shift away from the traditional sources of revenue. tom: china did not write out a check, made out to the united states treasury, right? ebrahim: to some degree. there is much more coming that way then historically has been the case, but my sense would be this probably has just about peaked. as greg said earlier, we are going to see a trade deal that partly rolls back some of these tariffs. what we will be looking at here is i think highly symbolic. francine: what does this mean for euro? europe is contending with weak growth in the region, but it is also a third wheel in the u.s.-china trade relationship. are we going to see tariffs on europe, or europe pick a fight with china? ebrahim: i do not think we will see tariffs being imposed on

europe in any way. coming up earlier in the show, the primarily -- the primary point of this administration is to project as progrowth going into the next election. the risk of a major disruptive followthrough on trade tariffs is relatively low. that being said, it could also not be that clear for europe and we were main somewhat bearish in the near term. we have brexit uncertainty weighing on europe to a small degree. we have other emerging markets, including china, still having a negative impact on europe. in the internal issues, if they week,t result this very france has also not overcome the internal drag. we will still see more disappointment on the economic data. aybe there is a hint of negative halo effect on europe

from the u.s.-china trade short-term. that being said, we are looking at a positive inflection point later in the year. say, ae: is it, as you hint of negative halo, or is the arket complacent about negative e.u.-china trade war? ebrahim: we do not expect an e.u.-china trade war. itself.positioning we do think that they will be -- there will be some reallocation of some chinese demand, which will have an impact. but a modest one on europe as well. i do not think this will end up being a major additional headwind, but it will continue to fit into the path where we seem to a some topically get to the european bottom, but we never get that.

tom: the dampening curve, the columnists, the stability as we almness, the stability. what are you hoping for? ebrahim: in europe, what you have to worry about is the system is fragile. it is fragile in banking, it is fragile in politics. there is clearly major downside risk. zone, that revolves around italy. francine: up next, aramco and its bankers are preparing to kick off a mega debt deal. bloomberg was told that early indications suggest investors are already crowding in. it is still dynamic. the books have not been closed, but it is upward of most numbers.

>> it is north of 30 points. >> i believe so. ♪

viviana: this is "bloomberg surveillance."

shares of general election are -- shares of general electric are falling in premarket trading. a december upgrade on ge has been reversed. pinterest hopes to raise almost $1.3 billion in its ipo. today the company begins roadshows to pit shares took investors. the price range will be at $15 to $17 per share. in 2017, pinterest was valued at about $12 billion. carlos ghosn has formally lost his last title at nissan. jailed former chairman of the automaker has been removed from the board. he is in a tokyo jail, accused of numerous financial crimes at. after being freed on bail, he was rearrested last week. francine: thanks so much. watched bys being investors globally. billion-plus kickoff on

the debt deal could be possible this week. establish all permanent presence in the capital markets that could have both debt and capital instruments, so i can assure you that in a couple of years you are going to have your choice between investing your big savings from working for and aramco shares. francine: joining us to discuss all of this is bloomberg's middle east finance analyst, matthew martin. it printing a massive deal, or low pricing? >> as we were going into this deal, the initial feedback we were getting from people close to aramco is that aramco main concern is pricing, that they

are going to be very price-sensitive. if they could do a cheap deal, they would be looking at printing a cheaper deal. probably in the situation, if you look at the size of the book now, it is over $30 billion already and seems to be growing by the minute. aramco are probably going to be in the position where they can take both boxes and print a massive deal and get very low pricing, perhaps lower than the saudi sovereign. francine: do we have any idea where pricing will end up? greg: it is difficult to tell -- matthew: it is difficult to tell. we should get some initial pricing out of this deal today. billionunk of this $30 order, a significant part of that, those offers are coming in at pricing below the saudi's offer and -- the saudi

sovereign. 10 basis points below the saudi sovereign. we will have to wait and see where the price ends up when we see that later on today. it is a fairly safe bet we will see aramco printing inside the sovereign. theany ways it is capped by saudi sovereign rating. the are constrained by governance issues. if not for that, it would be much higher. matthew telling us they are priced to perfection. what i am liking here is that you have chemistry and philosophy as your undergraduate degree at king's college. what is the chemistry and philosophy within the roadshow? jamie dimon trots out the love and the kisses. is this about the saudi family or separately about an oil

business? matthew: both things are at work. you have a aramco, which if you look at aramco, the company on its own, we got to see the full look at the finances for the first time last week. this amazing cash generation business that aramco has. it will allay any concerns about aramco possibility to generate cash and pay off the debt. the flipside is that the saudi government, it is a country that has a budget deficit, and the bulk of its revenues come from aramco and will continue to come from aramco for some time to come. how much the government can tinker with it through taxation is the question. that is going to be one of the concerns that investors have. tom: matthew martin, thank you so much, the report from dubai today. what was the one thing

you saw at the meetings with all the gurus we spoke to? francine: it was interesting to speak to a lot of banking experts about the merger between commerzbank and deutsche bank. a lot of people were reminding us that it is really the only way to get these cost cuts done, by merging, because that would give you a kind of free pass to regulators. it is also clear that a lot of people would rather cross merger. we do not know if the regulators are there yet. tom: very good. we will continue forward. it is an interesting week, as we move onto the imf later. this is bloomberg. ♪

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recognize that this is a national emergency. alix: ray dalio says the income gap is a national emergency. ,nd inching closer and closer larry kudlow is guardedly optimistic as the u.s. and china make headways on trade. eee.e battle for a libyan motionless a leader -- libya militia leader cities. on major david: a little disappointed in that open you did not mention the finals tonight. it did not make the cut. alix: because michigan is not in it. i thought you would be crying onset today. d: