>> the u.s. proposes retaliatory duties on european goods. tour.european short brexit delay. members of her party try to oust her yet again. globallyh bank cutting with investor solutions seeing three quarters of losses. ♪ francine: welcome to "bloomberg surveillance," i am in london. these are your markets. down significantly, half a

percent, half an hour ago, now trading pretty much flat. 0.05%, on the concern of these duties donald trump has said he will put on europe. we're looking at crude oil. pound on the back may asd to oust theresa she goes to the european capitals to get a better deal. coming up on "bloomberg surveillance," we bring you to the international arctic forum live from st. petersburg. the russian president speaks from a panel. $75 billion in orders for the debut bond sale, saudi aramco received, yields for the offering are likely to fall in

below saudi sovereign debt, reflecting investor appetite for paper from the world's most profitable company, marking a tremendous turnaround. last year, wall street briefly shunned saudi arabia following the murder of jamal khashoggi. theresa may goes to berlin and paris to get a delay. the eu's preference is for a longer delay than the prime minister wants. at home, talks have not moved the dial. the u.k. is preparing for the european elections in may, this provoking outrage from some tories. israel goes to the polls. netanyahu faces a tough challenge. the prime minister has wooed right wing voters by promising to annex the west bank. 6 million people are o

eligible to vote on tuesday. a ruling in the u.s. is a setback for donald trump, who is trying to curb immigration. the president is considering the removal of more top officials, after demanding the resignation of secretary kiersten nielsen. felicity huffman will plead guilty in the u.s. college admissions scandal, accused of cheat on the0 to admission test for her daughter. the actor is best known for, desperate housewives. deal could carry prison time. global news 24 hours a day on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. francine: thank you. breaking news out of turkey.

goings ofs and politics as it relates to lira. istanbul,rerun of that is a local publication. more on that shortly. that is the latest. this is the lira as we speak. downside risk to lira in the last couple days. 5.kish lira currently at 6788. the u.s. proposing tariffs on a host of bids, in response to harm being caused by illegal subsidies to airbus. nearly 15 years since the u.s. complained. it plans to target european products including seafood, cheese and wine.

the eu is saying it is preparing possible retaliations. joining us from brussels, our reporter, maria, which sectors could be impacted? is aviation -- clearly that has impact on the supply-chain. components. cheese, wine, luxury goods. this could have an impact on italy and france, that make those products. it is not just that. it is the timing. the u.s. argues these subsidies from eu are unfair. competition.e the chinese placed a huge order for airbus last month. anything good for airbus is a problem for boeing. the europeans did not expect this yesterday.

francine: what does it mean for the european economy as a whole? reporter: you can see why this is a big issue today. brussels, this was a bombshell, it has not gone well with policymakers. they say this is a great exaggeration. if you look macro, european economy has slowed. germany under pressure. weakness has to do with exports in car sector, that is a separate association. this negotiation has been handled by officials who after the european elections will be on their way out. there is trade between the u.s. and china and uncertainty on brexit. it is not an easy time for the eu. francine: thanks. what does this mean for markets? and rob marshall lee.

turkey news. see, what doo you you see the concerns becoming? the china trade war. we are close to a deal. his europe the next target? mike: the market has rallied strongly on the back of central banks and hopes the trade tensions would go from being on the boil to simmer. clearly concerning in that regard and it looks like that risk might be starting to .ome to fruition that has left us cost of -- cautious. francine: how can we be sure china and the u.s. will put their differences aside?

rob: we can't be sure. what have both got to lose? both have more to lose than they have to gain. trump negotiating tactics over time, he starts extreme and tries to meet in the middle. it is self-defeating to kill the u.s. consumer by raising tariffs to high -- too high for an extended time. china has been a big winner since it joined the wto many years ago. francine: trade concerns between the u.s. and europe or europe and china? mike: the u.s. and europe. it will growing 6%+, continue to grow at that pace giving stimulus coming through from the authorities there. eurozone is growing quite weekly. manufacturing sector contracting. eurozone is in a more vulnerable

position than china in terms of marginal hits to growth tipping it. francine: europe wouldn't pick a fight with china? mike: europe wouldn't want to fight with the u.s.. europe would be looking for deals with china. francine: how does china need europe? it is a symbiotic relationship. the german economy has been so weak because of the exports to china. when you have trade fears, that has led to lowering investment in china while people wait and see what ramifications are. if you are the supplier of capital goods into china, germany and european economies are hit by that short term at least. the other way around, china is going out into the world. companies are expanding. it becomes more symbiotic over time. until now, it is more than the other way around.

francine: given what the trump administration is proposing, tariffs on $11 billion of imports, does it change your portfolio thinking? mike: not significantly. it is more just additional risk if this were to escalate -- look at eurozone. manufacturing, pmi is weak. it is the weakest since 2012. germany, since 2009. it is not a great starting point to add marginal bad news on top of. what we need to see is a pickup in that new export orders pmi. at the moment that is not happening. there is potential the china stimulus helps to lift it. any political disruption that gets in the way of the turnaround in manufacturing sector in eurozone is problematic. service sector is holding up. service has picked up. don't forget that 27% of germans

work in manufacturing sector. the risk is it infects consumer confidence, the service sector. look at the gap between service pmi and the manufacturing new orders pmi in the eurozone, it never stays this wide for very long. it has to close by the services pmi coming down -- risk -- or the manufacturing pmi has to pick up. that has to happen in the next six months. it is hard to call. francine: thanks. breaking news out of airbus, saying the u.s. tariff threat is unjustified. both staying with us. coming up, we bring you the international art forum -- arctic forum from say petersburg. vladimir putin speaks on a panel moderated by the bloomberg senior executive editor, joined by world leaders from finland, iceland, norway and sweden.

this is bloomberg. ♪

finance andonomics, politics, this is "bloomberg surveillance," and i am francine lacqua in london. keep the questions coming. this is a gentleman riding in in, saying writing "what is the expected fiscal stimulus in the eurozone?" mike: the bulk comes from italy. normally you think of it as being a positive for growth. in the case of italy, if that leads to worries about the debt burden, the eurozone as a whole,

and it has clearly led to a tightening in credit conditions, weakening the italian economy, then that is a negative. really what eurozone needs's fiscal stimulus from germany, maybe france. at the moment, coming from italy, is coming from the wrong place. rob: i see it from a different perspective. broadly, a much greater push for liquidity across the world, generally dropping the cost of capital from em, giving a depressed sentiment over the last 18 months. the combination of factors is lowering bond yields across em and currencies. francine: thank you both. please keep the questions coming. mike and rob, staying with us. bloomberg business flash.

cutting 1600 jobs as part of a vast restructuring plan. adjustments are in global banking and investor solutions. the project could lead to 750 job cuts in france, after a plunge in trading revenue. completing the $5 billion share buyback. the announcement coming as the swiss pharmaceutical company spends off the care unit. first day of trading is today. they will focus on the core pharma business. ack dorsey just received salary. the modest sum is a reference. in 2017, to boost user engagement, the limit was increased to 280 characters. it is unclear if his salary will also double. thanks.:

could the worst be over for the china slowdown? the second-biggest economy of the world has bottomed and growth has picked up. call, expecting gdp growth of 6.7% 2019. the average was 6.2%. rob, when you look at china and the concern in the market it was, everything is going bad. now it is, better-than-expected. rob: i think the market got pessimistic. i am a stock investor with a 5-10 year horizon. i'm less worried about gdp. it doesn't give you the right investment. they got concerned about tariffs.

there is some reality about that. the currency adjusted sharply, offsetting the impact of tariffs quickly. the oil price effect. feedsn year, how that through to inflation, pmi stats -- they correlate together. it is still a negative territory currently and will remain as the oil price goes over $80 brent crude by may of this year. we still have a disinflationary force feeding into pmi stats. francine: do you worry about the debt level? rob: we are very conscious. we have investments in chinese banks. clear ofeen steering the property development part of the economy. service sector is growing fantastically, particularly in education, health care. we find great opportunities.

they all got hit hard last year. that was a dream for a stock ticker. the fourth quarter of last year. francine: thank you. next, trillion dollar asset manager says investors are not putting enough money into em. this is bloomberg. ♪

francine: this is "bloomberg

surveillance," i'm francine lacqua in london. turkey's ruling party will demand a rerun of local elections for the mayor of istanbul. is according to a ruling party official. yesterday, lira on a two week low. widespread irregularities alleged. both forrob, thank you sticking around. traders, yout lira keep on getting these reminders of political news flaring off in turkey. what thenderstand government has been trying to achieve.

the market has enforced discipline through the currency and capital. that remains the case. inflation levels are coming down. the electorate is unhappy. they don't like the currency dropping. the quality of life is affected. the urban voter is expressing that. whether there has been inappropriate electoral practices, i have no idea. francine: does it impact your investment in turkey? rob: we haven't had investments in turkey for the last three years, because we have been anticipating what has happened. reacted andket has priced in a downside scenario,

and when the currency drops, it is favorable to exporters, unfortunately quite a few are in things like european auto sector. it has not been the most buoyant market for products but clearly there are big valuation shifts and we need to reappraise that forward-looking. francine: venezuela, brazil, turkey. where are we with emerging markets? the fed is still there. rally?g can the -- they rally? mike: markets have come quite a way this year already. the fed is clearly helpful for emerging markets, not least stopping qt. the unwinding of the balance sheet was unhelpful for emerging market bonds and currencies and the equity market as well. from here, it will all be what

happens with global growth, helped by the stimulus and china, we have some optimism that that will stabilize growth in asia, china, india growth story looks healthy. if there is risk to em, it comes predominantly from eurozone and the u.s. rather than internal risk. i would have a neutral weight on emerging markets at the moment, just because there are risks around the u.s.-eurozone economy. if ucb acceleration in eurozone growth and the u.s. cycle looks to extend, emerging markets will do ok. francine: thank you both. we are back, with brexit. ♪ so with xfinity mobile

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now that's simple, easy, awesome. 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. francine: economics, finance, politics. i'm francine lacqua in london. it looks like a very turner asked painting -- turner-esque

painting. here is viviana. : it will demand a rerun in last month's local election of istanbul. it is disputing the results of the mayoral seat in the economic cup of the country. citing allegations of widespread voter fraud. the trump administration is proposing new tariffs on some european goods in response to the ongoing wto battle over for $11subsidies that threaten billion in imports. to ask the nation's longtime ruler.

security forces firing tear gas in a bid to disperse the thousand strong crowd. carlos ghosn says there is a conspiracy against him. the chairman says that they are playing a dirty game. this coming from a video message coming before his arrest and released today. -- thed ended out of names of specific people against which he made allegations. this is a conspiracy. this is not about specific events. this is not about greed or dictatorship. this is about conspiracy. viviana: global news 24 hours a day on the air and on tictoc on twitter. powered by more than 2700 journalists and analysts in more than 120 countries. heads to theresa may berlin and paris today as part of an effort to shore up a brexit delay. a longerrence is for delay than the prime minister

actually wants. says that theyy are preparing for european elections in may. rob, what does theresa may want to achieve today? rob: what she wants to do is square off the two key players in europe, angela merkel and emmanuel macron. she wants to make sure they understand her pitch for the extension that she has asked for. the real failure of this week is if she got no extension at all and eu stuck to its previous position. she feels she has to go and explain why she thinks britain will move to a point of decision. francine: how are the talks with labor going? rob: not well. we got a joint statement last

night. from the government cited said talks will continue. they will go back and ministers will talk to cheer ministers today. jeremy corbyn saying yet again that theresa may is not moving from the lines. dealtof people who have with theresa may feel like they go into a room and say that they need to get this, this, in this. and we needious these things but she says, this is what i'm doing. that is the sensation that it feels like labor is having at the moment. but labor and the conservatives are not that far apart. they want some sort of a customs union thing. they want to end free movement. it requires a lot of political ingenuity. francine: how many people in

parliament and how many of the probe brexit parliamentarians think theresa may is the problem? how hard are they trying to ouster -- oust her? rob: lots of tory mps think that she is the problem. mark and andrew were out yesterday and they say they want voteve another confidence because they think the conservative party has lost confidence in her. whether that many people have switched sides or if is the people on that site that got angrier, it is not clear. you can make a strong case that theresa may is responsible for a lot of the problems we are in, a lot of the difficulties are structural. obvious how a

different prime minister could get something else through this parliament. every time i work it out, i come to the conclusion that there is no conservative alternative leader that picks up more votes than theresa may does. well getnson might brexiteers on bores but would lose a load of down the middle tory mps. i can see how anyone gets more votes than her and she can't get enough. you replace her, i don't see how anything gets easier. hutton, one oft our reporters at westminster. israel goes to the votes today polls today to vote. we will have plenty more on jerusalem and israel through the day with our team of reporters on the ground. let's get back to brexit. joining us is a former ambassador to the european

union. he was also the british ambassador to the united states between 2007 and 2012. ambassador, as the americans would call you, thank you for joining us. will brussels give them a shortened extension? at the moment, it is anyone's guess. but does the european union avoid the blame for putting the u.k. out? or do they have red lines? >> i think they definitely have red lines. it may be a choice tomorrow between a short extension of the kind that theresa may wants or appears to want, and the longer one that would avoid this brinkmanship, this sense of the european summit every four weeks or six weeks that i think is debilitating for everyone. underlying issue

is if we get an extension, it is a longer extension going into next year. how do we avoid a situation in which the u.k. does what it is entitled to do as a full-blooded , boxing the switcher going on in the eu. it would be reasonable for the other countries to say that we need some sort of code of conduct so that when we come to ink at the budget framework and we choose the new european council president, the u.k. would be cooperative. -- languagelinkage theresa may was trying to signal . other leaders, even the friendly dutch prime minister says this is quite an important test of them if they can make an .xtension really work

the last time i spoke to you was 18 months ago. what surprised you in the last 18 months echo is at how the conservative party operates? or is it theresa may? what surprised me about the british general that theresa may did not move more quickly to try to reach across the aisle. there are two ways of doing brexit. one is what she has tried, doing it with her own party and the democratic unionists. do it on a wider basis we pick up support from around the house. that attack but very little has happened. and i think a large number of people in britain and around europe are entitled to be fairly

mystified for the ultimate negotiating strategy. from angela merkel to more reluctant members of the union, they say we need to know what the plan is. we need to have a sense that this is going somewhere. we can't sign another completely length check. -- blank check. francine: first, the market was optimistic that no deal was off the table and so far, they have been proven right. will they freak out or whatever you want to collect if there is leadership? or does it make no difference? we have been saying for over a year now that because there is not that majority in parliament in favor of no deal, you're not going to have a no deal brexit. i think that won't change no matter what happens. i think the reason that sterling higher is-- isn't

that they are worried about the prospect for an election. they are thinking about what an election could mean in terms of maybe the risk of a labor government. and how that may increase the uncertainty around brexit. i still think you don't end up with a no deal brexit. the no deal brexit risk is pretty much off the table. still a huge amount of uncertainty about how the politics will evolve, potentially involving an election, referendum, or the shift in customs unions to a softer brexit. francine: it is quite hard. we have never seen it before so it is quite hard to look at history. about economics or politics, what is it from the eu side? both, butald: it is

the european project is a political project. what is uniting leaders at the moment is the fear of eurocentric parties in their own determination not to go the british path which would not be a great model for political success. case in theill the continental europe that it is -- that there is more binding people together. as far as britain is concerned, the immediate issue is whether theresa may who is our prime minister can push this deal with labor to some sort of conclusion over the next two months or three months. no one else can do that. if she fails in that attempt, i don't see any solution but to have a general election or something to break the logjam. francine: why is it in jeremy

corbyn's interest to make a deal with the prime minister? it's easier for him to say you can't do a deal. mr. sheinwald: it's not obvious that failing to do a deal will do his election prospect any harm. if he is able to win from the prime minister a chunk of labor policy, import for the customs union, maybe support for a down the road,um it might motivate part of his base even though it will alienate some as well. if you look at momentum, look at younger people, i think they would be energized by him starting to see a way through on this issue rather than the way he has been perceived to be for the last 2.5 to three years. francine: you were also u.k. ambassador to the u.s. and i feel like you are inexpert in the crises we are dealing with

today. the trump administration imposing tariffs of $11 billion. is there anything the eu can do to protect themselves? i don't know if they can do anymore to dissuade the u.s. from doing it because if that is the decision, that is the decision. in thehat they do circumstances, remain united and use the collective power of commercial policy to make clear that there will be consequences and retaliation if the u.s. takes unwarranted action. that is what happens when you take this kind of action with a powerful trade block. beenn the past, there have these disputes over airbus and that is the way it has gone. it usually gets resolved in the long run but in the short run, it creates a great deal of turbulence. francine: thank you so much for

joining us today, nigel schein walt -- scheinwald. coming up on bloomberg, we bring -- the international arctic russian president vladimir putin byaks on a panel moderated bloomberg. he is joined by leaders from norway, iceland, sweden, and finland. this is bloomberg. ♪

francine: this is bloomberg surveillance. i'm francine lacqua in london. rally adding value to stocks, but investors have

decided it is time to cash out of some highflying names. amazon, facebook, netflix, and apple have gained at least 35% from christmas eve. some investors to call it quits and take the profits. at faang, isu look it time to get out? : we think it is time for value overgrowth. belly stocks are more resilient in a downturn. thet that we are late in economic cycle, we don't know how much longer this recovery has got. but when we get to the next downturn, you see the more expensive growth stocks are much greater than on the value stocks. will see it during the next downturn as well. i would have a preference of value stocks. francine: are there specific value stocks that you like right now?

mike: we do it in terms of sectors. financials, great. we prefer u.s. financials to europe. -- overover weights weights and financials. health care of stocks as being more expensive. you have a bit of a defensive nature there as well as being relatively cheap. but really, when we look across the different sectors of value stocks, we're looking for quality stocks. ofyou get the combination quality, strong balance sheet, and value, that is very precious. into a downturn, quality and volume tends to outperform. you want to avoid the value traps given the level of

corporate leverage. francine: mike, i have the question we are asking on our blog. and libor on the bloomberg -- on the bloomberg terminal. which market's most vulnerable to reversal? mike: i would say italy. you have a eurozone that is struggling to grow. it is in contraction. the big question i want to know the answer to, by the end of the year, is the unemployment rate in italy higher than it is now? , there are risks on the spread of italian bonds relative to bund. francine: a chart that hillary clarke made me look at today, she said to ask mike about it because it is a great chart. we are looking at volatility and what it means for investors,

they may be pushed to take bigger risks by moving further away out on the yield curve or from less credit worthy countries. where does volatility go from here? mike: higher, i would say. i don't think we have seen the end of it. had a very strong rally but i think markets are going to be choppy. late in the economic cycle, you have a yield curve that is very flat. the in a plumage very low. you have the potential for margin squeeze -- unemployment rate is very low. you have the potential for margin squeeze. i think that the chances for the likets to remain volatile we saw last year unreasonably high. bell frommike jpmorgan asset management.

of next, we are live in tel aviv as israel goes to the polls. can they overcome corruption allegations? that conversation is up next. this is bloomberg. ♪

francine: economics, finance, politics. israel.cision time for the country votes today on whether to hand benjamin netanyahu a fifth term. beenrime minister has tainted by corruption allegations and faces tough opposition from a retired general. victorynyahu clinch the and become israel's longest-serving leader? joining us is bloomberg's israel government reporter. how has the campaign been leading up to today? back.it has been again -- you can back -- it has been neck and neck. and toughestargest campaign that benjamin netanyahu has faced.

on howeally a referendum israelis feel about the corruption charges against him. any centrist party has given him a new challenge and it is unclear how tonight will turn out for both groups. what are the wider regional implications of the vote, ivan? ivan: netanyahu has built himself large international stature. he has close ties with donald trump, russia, and other world leaders. relations between israel and the gulf arab states. any change in leadership will definitely shake up those relations, at least a little bit. he has raised the possibility of extending israeli sovereignty to west bank settlements. , theis main challenger

blue and white block, has expressed a little more openness to peace talks. there could be more progress there potentially under a different leader. francine: we will follow this very closely. no bloomberg surveillance continues in the next hour with tom keene joining me out of new york. we will be talking to the former u.s. ambassador to israel as benjamin netanyahu fights for a fifth term. we'll have a full brexit roundup as theresa may goes to speak with angela merkel. pro brexiteers are trying to oust the prime minister. this is bloomberg. ♪

the u.s. proposes

retaliatory tariffs on $11 billion of european goods including jeans and wine. the british prime minister heads to berlin and paris to win a short brexit delay. at home, members of her own party are trying to oust her yet again. is french bacons -- bank cutting globally. investors are seeing losses. this is bloomberg surveillance. good afternoon if you're watching from asia. tom keene in new york. we also need to look at a tariff update. we now understand that president is finding possibly a deal with china and setting his sights on tariffs for europe. tom: president trump completely distracted after what we saw yesterday in the u.s.. a purge at the immigration department for the department of

homeland security. and an interview with charles grassley of iowa that is already pushing back against the president. we will spend time looking at domestic politics in the u.s., but let's get straight to bloomberg first word news. today, british prime minister theresa may faces battles at home and abroad. she travels to paris and berlin to win a short delay for the european -- for the british departure from the european union. members of the conservative party are trying to throw her overboard. tariffs on $11 billion of goods, that is the trump administration's threat to europe. this is in response to european union subsidies. on the duties would be area's cycles -- various cycles, cheeses, and winds.

voters must decide whether to endorse his brand of nationalism or deny him a fifth term. polls show he is in a tight race . the french bank is cutting 1600 jobs globally, mostly at investment banks. stocks can intensify efforts to improve unit performance. this focuses on fixed income trading. global news 24 hours a day on air and on tictoc on twitter. howard by 2700 journalists in more than 120 countries. one data stream check today, the data is quiet but you have to oil down at the bottom. it got a lift over the last 24 hours. , and brent crude

71.23, francine. the dollar a little changed and european shares actually gained. they have regained a little bit, this seems to be addressed in the market with the new tariffs. i'm looking at the pound strengthening between the u.k. and european leaders on brexit. let's kick off with the latest on trade. on u.s. kicking off tariffs helicopters, seafood, cheese, and wine. the white house says this is caused by illegal subsidies to airbus. threatsalls the tariff totally unjustified and plans to react with similar plans on boeing. thanks to our guests for joining

us. how do i look at this? will we see tariffs that really hurt the europeans? or is this just president trump trying to talk to his base? he is getting an agreement with china's of the needs to be seen as a strong man act of -- strongman? >> may be the more relevant issue here is if the market was already expecting at least partially something like this. that is why you are not seeing a small panic take place. from the framework rebuilds trying to extract the trade discount of different assets around the world, it shows something very interesting over the last few months. was showing upde in european assets. particularly in european stock markets. way, told you that the market was expecting something. the u.s.-china tension was

easing off, they would likely turn towards europe. build -- actually said signaled that this is in play. so the market has other concerns in the immediate future right now. it is worth it to start thinking about it, but not today. francine: can they retaliate and make a difference? the signal, politically, is a bad one. the target specific goods where there was political salience. the timing is a bit off on the european side. the europeans are permitting the chinese talk about trade. so the timing is a bit off. sidenk from the european

as was suggested before, they knew something was coming. these have been cooking for 14 years. airbus is looking at the money on the table and maybe it's not as bad as people expect. tom: we have new mercantilism from president trump. who is the biggest loser? >> that is a tough question. the european union, potentially. have to do with this. the eu potentially has the most to lose. -- tom:: the chinese the chinese will adapt to this very differently. who will you watch in europe as they adjust and adapt to this president? >> the numbers tell you it is germany. it is the core.

seen thehy we have underperformance of the german economy towards the end of the year and the early part of this year. this is also shifting writer out -- right about now. on the margin, germany is exposed. places like ireland, the netherlands. but the most important is, by far, germany. francine: how much is it a concern that this does not look good? you have a very weak european economy. the 11 billion dollars looks bad for europe. but what does it mean for anyone looking at the health of the eu economy? >> it will obviously have a setback for the economy. observe, there are other factors here to become very important.

it has to do with confidence, it has to be a hit from the u.s. itself. this pushes become a bit higher -- this push has become a bit higher. what our frameworks would indicate right about now. i think the noise is there politically and the signaling is there. we can talkwhy about getting it back in summer. this is operational today. clearne: and there is no leader at the moment. >> as always, i guess. we will take us more seriously. it has been an issue for the

long time. -- for a long time. when you look at the eurozone crisis, for example, leadership was always active. she has always needed the others to get something done. so it is an issue. tohink the eu has managed adapt itself around it. this president and this agenda, i think it makes things more difficult. it goes back to a european response to a trade war with the united states. his europe really on a new territory? >> they have been concerns in brussels for some time.

sector, it isive not easy to work with the u.s. administration. in brussels, look at what they managed to achieve when they met trump. a great success but in terms of gaining time, not sobering in the matter. the timing has been a bit of a difficult one here. with that amount of money on the table, potentially, there would be these concerns. coming up on bloomberg, we bring you the international arctic forum live from st. petersburg. bloombergderated by senior executive editor. he's joined by leaders from norway, iceland, finland, sweden, and that is about two

hours from now. this is bloomberg. ♪

tom: good morning, everyone. a set of stories out of washington, trump and immigration. and the travels of prime minister may. help me here. chancellor merkel saying we are not going to budge on ireland, is it that simple? francine: it is that simple. this is on the backstop. we are figuring out if there is any leeway. said hend ireland have don't want the insurance policy

suddenly to end. reports that merkel would accept a backstop time limit. we know theresa may will arrive in paris today. macron and merkel on the round-trip as she tries to get support for a shorter extension or something more with a backstop. tom: and street and we go with the headlines. our guests are with us. we will go if you. where is the red line for prime minister may on ireland? what i find interesting to me is that ireland has been outside the story for the last number of days. and here it is again, front and center. where's the red line for prime minister may on ireland?

>> don't think that is the issue at this point. how can she manage all the division? corbyn can do the same kind of job. beginningom the very that they are not going to throw ireland under the bus. so there is no surprise there. now the customs deal that has been proposed by the labour party could be part of the solution. but we are not there. next two days, the next 24 hours specifically are about more time. there is a song, one more time. this is what we're doing here. this is what theresa may has to do. macron ande bad cop then to the good cop merkel. that is what this is about. ireland, the customs union, that

is later on. former prime minister for the u.k. writing in the telegraph or the times over the disaster of a no deal. what does ubs say about the outcome of a no deal? this. are separated about what does ubs say about a possible no deal on friday? what would that mean? back to last summer trying to estimate the impact around different scenarios. economically speaking, this is one of the most painful ones. it will depend on what sort of policy response you get back. ultimately, you're going to lose some critical points of growth. and probably for the next 10 years or so.

i don't think this happens automatically in the first day. the stage for something that is not necessarily the optimal outcome for the u.k. and, to some extent, europe, too. thecine: we got a note from -- the brexit withdrawal deal will not be reopened. he is open to cross party talks and says the eu needs a roadmap to brexit from theresa may. what is the concern? we hoping that labor and the tories come together and very little time where theresa may could've started these negotiations 18 months ago? we start unwinding all the mistakes that theresa may has made since 2016, we will be up for a few hours. withanaged to overdo it david cameron in terms of being a that prime minister and the threshold was very high.

if a new agreement is done, nobody is changing it. if the u.k. is able by merrick all to agree to a customs union a, they will change the political declaration and it will change the sentence to job done. are we there? no. are we going to get there? i think no. we are not there yet. francine: are we going to have a long extension or is theresa may going to get a short extension? not getting the long extension by task. i think he thinks that by giving all this time, the u.k. will reconsider. i think it will be a short distinction -- short extension. maybe june. time we come back, there may be more headlines as prime minister may travels. next hour, this

is an exceptionally important conversation. , former u.s.r ambassador to israel will join us. benjamin netanyahu fighting for his political life in israel. stay tuned for the next hour. this is bloomberg. ♪

viviana: this is bloomberg surveillance. let's get to bloomberg business flash. australian billionaire jame

$7.1 billion, one headquartered in las vegas and has casinos in macau. gambling enclave is solely focused on the australian markets. shares will be surging in tokyo. the hedge fund is building a for some of the business units. they believed amazon and netflix would be interested in taking over the movie studio. revival of the shipping container business in the second half of the year, there is a weak first two quarters because of global trade uncertainties. we spoke with the chief operating officer. >> and taking a fairly more conservative growth to trade. we're, let's say

disciplined when it comes to capacity growth. thank you so much, viviana. let's focus on the political risk outside of brexit. germany, we can talk italy. to get straight intelligence. when you see some of the weitical risks, this is what make up for this deficit because growth is barely there. when you look at germany, what worries you the most in the arena that impacts research? >> in some ways, i would say that this is backward looking. that is the possibility that we get stuck a bit. you ask the economist, there is a very high chance that we will get sequential increase in growth.

europe is going to be critical in this and also affected by what the rest of the world does. i am really worried about basically the known unknowns. brexit can create something that in the next three days. those are the impacts here. atside of this, if i look the economic numbers, we think it is very likely that we are basically experiencing a turning point. that is why we have a job. francine: do you feel the same way? is some of the political risk back because people know it and they see it in the past? or could return turn for something much uglier? it will turnink uglier in the short term. i think the next real flashpoint in terms of italy will be a bit of deja vu about the budget. to find 40y need

billion to deal with existing commitments. is coming from, nobody has an idea. they are supposed to announce unified target. now we are revising to 0.1. the budget deficit goes up and i move think that italy will the story on the political side. the advantage for italy is usual. the timing is good because the commission will just be installed. it is unclear if they want to have a fight over the budget. francine: thank you both for being here this morning. they are saying that they are ready to lead the u.k. stay in the customs union. this is bloomberg. -- let the u.k. stay in the customs union. this is bloomberg. ♪

♪ bloomberg "surveillance," francine lacqua in london, tom keene in new york. we are following the travels of prime minister may.

rumor has it she did not take british air. francine: i think we can confirm it. tom: you go to the lindy city airport -- london city airport and have a coffee and then go to berlin. i do not think that is the way she went. francine: she is landing in 30 minutes from now and probably has also both phones from the royal air force to make the crisis more imminent. tom: we will follow her travels on this tuesday. wolfango piccoli and yianos -- with us. what are you watching in the political and financial suit of turkey? of turkey? yianos: we want some

stabilization for the electoral outcome to become old news. once that is the case, we can concentrate on the economic set up and the potential of getting something new from the minister of finance in terms of structural reform. ultimately, we have a turning point in terms of the cycle in turkey in the sense that we had a big attraction in demand. the currency moved substantially by now so there is a chance that together with credit not getting out of hand as it appeared to at least at some point, all of us would argue for some higher stabilization over the next few months. longer-term is still a fairly complicated story. let's focus on the near-term, and the near-term argues for stabilization as long as the noise from politics dies down. a records equities are high, which is a precursor for what we will see in the coming

days. let me show a chart on turkish chart.his is a log i do not normally show this on tv. from january 31, the weakening of turkish lira. this really getting out the new recent weakness on turkey. the backdrop is 24% interest rates. that is not sustainable, is it? wolfango: when you are dealing with inflation about 20% and still rising, it is tricky, it is difficult. politically, is that sustainable? potentially you could say yes. no elections for the next four years. erdo isgan -- that is

not our politics. we have a fight with the u.s. coming in the next few weeks and politics domestically will be very intense, polarized. adogan has just had significant defeat and to increase their popularity, i doubt he will let it go. the reforms the market has been waiting for, unless we see a significant internal market pressure, will remain a daydream. francine: when will we see a full resumption of liquidity in banks andd turkish their international counterparts? is that when you can say we are back to a more stable footing? yianos: they are very closely related to the set up we see in markets on a daily basis. the risk of various banks are

looking at each other and at the news. that is why you need to see a bed of stabilization from the political side. bit. there is a certain level and price and implied volatility where the market will be tempted by a very high carry. francine: thank you both very much. we are getting breaking news out of the swiss equity index. high,i reaching a record so we will delve into that and look at the correlations that we could be seeing. the swiss equity index reaching a record high. let's get to the bloomberg first word news. viviana: demand for saudi aramco's first international bond offering skyrocketing. they received $85 billion in orders.

yields may fall below saudi arabia sovereign debt, a rare situation for a state owned company, marking a turnaround from last year. set --reet reflation and carlos ghosn says there is a conspiracy against him. recorded a video message before his latest rearrest. >> this is a conspiracy. this is not about specific events. this is not about greed. this is not about dictatorship. this is about the plot. this is about conspiracy. viviana: carlos ghosn says his plans for a merger would threaten nissan. felicity huffman is among more than a dozen people to plead guilty in the college missions -- admissions scandal. many of the parents are making plea agreements that include

minimal time in prison. prosecutors say they will file more charges against others. technia beating texas 85-77 in overtime to win its first ncaa men's basketball title, a whole lot of court action. de'andre hunter leading the cavaliers with 27 points. left.econds global news -- global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am viviana hurtado. i will never live this down. tom: viviana, virginia tech, good morning. this is so important and that these two teams and the global audience, the pixie dust is these are not basketball machines. these are almost students. viviana: they are, and this is

the first time that we see this kind of march madness final where you did not see the top seeds. this is really exciting and really formidable effort from the red raiders. tom: thank you so much. her bracket is better than mine, to say the least. we will talk banking madness with elisa martinuzzi. socgen has a heritage. they are trading and have a derivative of mathematical excellence that goes back years. are they done with trading in fancy gamma and greek letters? elisa: what they have done is try to be a global peer and more businesses than they are strong in, so what you see you today with the job cuts announcement of 1600 people, on investment

banking and fixed income, errors and which bank has clearly struggled and tried to be a global pair is not generating profitability. i think it marks a new way potentially of retreat by the likes of societe generale and other european banks who have ambitions to compete with wall street and other businesses. tom: is there more to come? is this a precursor to readjustments of the trading? we have it with the german banking, but do you assume more to come? elisa: if you look at the estimatingalysts are between 10% and 15% decline in fixed revenue -- fixed equity revenue. starting with profitability, we will have to look at those numbers again, the cost income again, and pull the levers they can. toncine: when are you going

a real cross-border consolidation? we ask about this every time. what exactly needs to happen. facingeurope is still regulatory and structural hurdles which come in the form of individual countries acquiring banks in europe that are overseen by the ecb that have local liquidity and local funds. eased,hat is removed or which will probably come with a common deposit insurance scheme, it is likely you will see that's unlikely you will see a cross-border consolidation. tom: can you tell me what you are looking for this week when it comes to commerce bank? elisa: we have been led to believe that there will be a decision made one way or another. deutsche bank could present a perimeter they are working

towards, but we do not have any indication that is definitely coming so we will have to watch. francine: elisa martinuzzi, thank you so much. coming up, "bloomberg technology" emily chang sits down with the executive officer at sprint and operator of softbank's $5 billion technology fund. this is bloomberg. ♪

♪ "surveillance," francine lacqua and london, tom keene in new york. let's look at a chart and then we will have a conversation with

a true expert on exports. germany exports to the united kingdom, long chart, slope matters. 1980's,oom, up we go, and i extrapolate out the 10 years before the crisis. this is the gap of good feeling that did not happen for german exports, automobiles. arnot ellinghorst is absolutely definitive on the dynamics of german automobiles, and we are thrilled to have a conversation with him. still haveutomobiles the magic they use to in engineering? arnot: i believe they do. they play different regions now. they are probably at the strongest brand equity and china than any of the western brands they are becoming more of a commodity. tom: they are a unit weapon for

the president. how does germany and brussels and europe fight back on a president who counts autos as units from germany? arnot: there is very little the germans can do on this one. they can argue as much as they want that they are net exporters from the u.s., but it is a fact, but they are shipping 650,000 units a year from europe to the u.s., and they are vulnerable. if we are moving to a 25% tax about 6n, there are billion euros of profit at risk. francine: what is the biggest concern for the auto industry in germany and europe as a whole? regulation or tariffs from the u.s.? adjustovertime, you can your business model.

you can add an engine plan to the u.s. the european emission regulation, commanding 95 grams -- 2020, 2021, that is completely transforming the value chain of how you manufacture a car and adding huge costs to carmakers. there are potential fines in the yearswo years -- next two of almost 30 billion euros. that transformation is the biggest of any industry globally. francine: we are talking about the european economy and the impact of tariffs. you are expecting the european economy to come up with positive news, but what do you do with the german car sector? news,: despite the bad you have to think positively about european risks and european cyclical risks.

when you talk to equity strategists, you will talk about finance and cars. if we see the domestic economy and global trade doing well prompted by a better picture primarily from china, but also from the u.s., there is the impetus, that gross impulse -- growth impulse could dominate everything else in the near term , especially when you start from a low basis. i would argue that maybe the other counter thought is when circulation changes or the prospect of regulation becomes binding, it affects consumers in the sense that you have to change cars, so you are creating some additional demand either pressure you introduced to the supplier. i am not saying any of this is operational now, but even in the u.k. with the new regulations in london, people will buy new cars in response. francine: let me kick off with carlos ghosn.

are we going to see a different kind of alliance emerging that will impact the car industry as a whole? arnot: i don't think we will see a hugely different alliance because nissan and renault are dependent on each other, so they need to get their act together. i do not think renault is looking for another huge alliance partner, it was speculated they are interested in fiat chrysler -- fiat chrysler. it is about getting their act together, fixing their relationship. nissan is underrepresented in the alliance and the french side should open up and give them more influence in the alliance to level out the playing field. tom: you and your team have an exceptionally cautious view for european autos. if we believe in capitalism and they will clear the market, what

tomanagements need to do jumpstart to a better financial income or do we just assume there is a state proxy? arnot: i think we talk about significantly more consolidation , sharing platforms, sharing engines, moving the investment that goes into the combustion engine into joint ventures to get to a more rational industry. it is really going back to the comments on presentation a couple years back. the industry is allocating capital to the wrong technologies and areas consumers are not paying for. that needs to change and also in order to attract investors. the valuations are at the bottom of any sector globally. --: are you saying new auto will not work on tesla? arnot: the powertrain is the

solution moving forward. i believe in electric vehicles and they could be 20% of the market as long as people can charge them at home. 25% of the market is a big chunk. it makes mobility easier and cheaper for consumers. i believe in the transformation away from diesel towards hybrids, plug-in hybrids, and full electric vehicles. tom: we are thrilled to have you with us. coming up, i am thrilled to theunce a conversation with governor of the international monetary fund. francine and i in washington late this week, this is bloomberg. ♪

♪ this is bloomberg "surveillance." --l gross is performance former mutual fund as shrinking by 70%. the drop was mainly caused by gross's redemptions, the bond

plunging from 30 million -- 330 million in february to 220 million in march. one of the world's largest asset managers is urging investors to bet on emerging markets. bloomberg speaking to the ceo of p gim. believe thately emerging markets are where most of that growth will come over the next decade, so i spend quite a bit of time in asia and we absolutely are investing across the region. we think most investors are not exposed enough. viviana: that is the bloomberg business flash. tom: viviana, thank you. the prime minister of the united kingdom will arrive at the chancellery in berlin, the executive offices of chancellor merkel. this is the idea of the european

union and the british and the german flag awaiting the prime minister of the united kingdom. we will continue now. oil,eak on dollar and on oil has come out of nowhere. many others really getting this right, talking about an elevation in oil. what is at ubs? is $70 a barrel sustainable? yianos: according to our oil analyst, yes. the recovery is very significant. it is not that common historically. a large chunk of it was demand geared and that is good news. you had additional supply factors, but we have to be cognizant of the fact that the type of supply availability especially from the u.s. has

become a lot more elastic in the course of the last few years, so unless we have a significant growth optic or major supply shock, you will see a steady flow of additional supply out of the u.s. that will contain the upside. francine: ubs has been one of the houses that has been more optimistic about world growth and all the gloom and doom we saw, and now people are catching up with your vision. how would you describe growth worldwide for 2019? yianos: better than 2018, that is the first observation. if you want to have a visual in terms of what are the underlying factors, the factor about oil, recovering that quickly, at ties 2016.ell to if you want a template of how things played out, 2016 is a good template and that the

central banks are accommodative and risks are doing well. the central banks are staying behind the curve to account for the increased and that is how you get inflation going. oil and the stock market are elements and oil will eventually rise again. bloomberggoing on at across all our platforms. a conversation with chuck grassley on immigration in washington. prime minister may landing in germany as she will migrate from paris to london to brussels. john fraher in conversation with the president of russia. ♪ the biggest week in television is back!

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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, the president demands a tougher stance to stem

the flow of central american families at the mexico border. there is a purge dj -- dhs. "someey of iowa sees stability from the president." berlin and then paris and maybe brussels. ms. maysus may -- will find time to speak to jeremy corbyn? it is able market and you are not in it. i am tom keene, francine the claw with me -- francine lacqua with me. what we ministered -- witnessed of the prime minister coming out and doing a photo op, is this anything more? francine: it probably is a photo op for theresa may to show back to her country and parliamentarians that she is

still in charge. we hear from various sides of parliament, but many brexiteers from her party are trying to oust her. may can be done is theresa rounding the edges before the e.u. summit to muster support for really shorter extension. trips,ith a couple of theresa may will get some leaders on side. tom: we will go to kevin cirilli in washington. right now in new york city, here is viviana hurtado. viviana: british prime minister theresa may arriving in berlin as she faces a battle at home and abroad. after berlin she travels to paris and perhaps to brussels to win a short delay from the uk's departure from the european union. some members of her party are trying to throw her overboard, angry she has had brexit talks

with the opposition labour party. tariffs on $11 billion worth of goods, that is trumps threat in response -- trump's threats in response to fines against boeing. benjamin netanyahu facing the political fight of his life, voters must decide to endorse his brand of nationalism or deny him a fifth term. his party is in a tight race. job cuts on the way at soccer -- societe generale. they are cutting 1600 jobs globally. --y must and testify intensify efforts to improve the unit's performance, mainly focused on fixed income trading. global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more

than 120 countries. i am viviana hurtado. this is bloomberg. tom: very good. data check. i was daydreaming about the 47 events going on right now. futures that negative two. the euro stronger and oil the lead story. brent crude up to $71 a barrel. francine: i am looking at a similar data check. we are looking at pound because we saw the pageantry of theresa may arriving in berlin, speaking to angela merkel. we are keeping and i on the e.u.-u.s. trade war. we did see a selloff in assets and they are recouping the losses. i am looking at crude oil american, 64.62. tariffs on proposing a host of european goods

including helicopters, seafood, cheese, and will -- and wine, in to airbus. subsidies joining us now from brussels is maria tadeo. do we know exactly what will be targeted? this is 11 billion, a pretty hefty number but not huge. what will be taxed? maria: we understand this will be about aviation, aircraft components. it affects the entire supply chain, but she's, wine -- cheese, wine, luxury goods. it seems this was tailored at france like the cars were aimed at germany. the europeans were not expecting this and were surprised by the timing. this goes back 50 years and did not think trump would revive the

case. they are surprised and it is difficult politically because of brexit uncertainty, but from a macro perspective, the european economy does not know what to do. francine: what does that mean for the european economy? look at germany, this is the biggest economy. it has been flirting with recession throughout the entire year, a lot having to do with exports and the car negotiation. the germans really wanted to get it done but it is difficult because the americans want to get a big deal and emulate what they did in mexico and canada. the europeans will tell you, we will not do this. you need to look at the single market as a single unit, but it is not good news for the european economy. it is a big threat and certainly jean claude juncker is not happy. tom: what is the tension between

brussels and chancellor merkel and germany? the is the relationship of institution of brussels with the leader of germany? maria: at this point, they are very much on the same page. angela merkel has said many times that you need to look at the e.u. is a political and legal project. the europeans will tell you, we cannot use the german cars to cut a bigger deal and we will stand by the germans. when it comes to trade, they have -- they think trump will try to separate european countries, and that is not in the strategic entrance of the e.u. tadeo, thank you so much, from brussels. onme minister may will move later today.

will stand up and say, you have got it wrong, capitalism will endure. in the cacophony of 2019, we tiedness.is bow what does then, gloom crew get wrong now? drew: first of all, the yield curve has not inverted. i come into work and people are like, the yield curve inverted. we are not quite there yet in terms of that factor signaling a recession. productivity is accelerating, so you can believe we are in the late stages of a cycle and productivity is odd, or it behaves how it normally does in the middle of a cycle and we

have a few more years to go, which is my preferred way of thinking about it. economy wide profit margins have pretty much been stable and seem like they will be stable at 11% for quite some time. we have a lot of job growth so even if there is uncertainty in the world and ceos pull back on hiring plans, you would have to pull back a lot to get the number of job openings down to the number of unemployed. tom: we will talk about the stock market coming up in kevin cirilli on immigration as well. how do you respond to an economy's dynamics and political leader? can president trump help -- help or hurt this economy, or is it a dynamic of the americans -- animal spirits? drew: i think the animal spirits matter most. when you think of financial markets, they have been impacted by uncertainty and that is coming from trade.

,he u.s. and mexico, canada europe, and ongoing, people do not know how to price uncertainty, particularly political uncertainty. marketore important to the underlying dynamics and they get lost. the smartest thing is to look through the noise at the u.s. fundamentals in the economy where the u.s. consumer is looking good. francine: do you worry about a policy mistake from the fed? drew: i always do, with the bigger mistake is that they wait too long to continue hiking. when you look at the growth we are seeing, inflation is pretty much at the target level. unemployment is well below where people think is traditionally normal, so they have to watch out for the first sign that inflation is picking up.

if we sense it before they do and we are not moving, we will sense they will get behind the curve. it is a risk they run and it could lead to yields moving up more quickly than anticipated, which would be detrimental. rising yields is fine. rising yields because we feel like they are behind the curve, would not be. francine: drew matus stays with us. coming up, we bring you the international optic forum. russian president vladimir putin speaks on a panel moderated by john fraher and he is joined by world leaders from finland, norway, iceland, and sweden to discuss the future of the arctic. this is bloomberg. ♪

♪ viviana: this is bloomberg "surveillance." buy resorts is in talks to crown resort for $7.1 billion. crown is almost solely focused on the australian market. shares of sony surging. dan loeb is building a stake in the electronics maker in the move is pushing sony to explore options for some of its business units. netflixieve amazon and may be interested in taking over its movie studio. ap moller-maersk sees a revival in the shipping container service for the second half of the year. we speak with their chief operating officer.

>> we are probably at ap moller-maersk taking a more slightly conservative you to trade growth, forecasting between 1% and 3%. we are taking our own measures to make sure we are disciplined when it comes to capacity growth. viviana: that is the bloomberg business flash. tom: wonderful to have all of you with us worldwide and now we focus on washington. in america, extraordinarily news -- extraordinary news flow. i would suggest the interview of the day will be the gentleman from iowa later on who has served publicly since 1959. his chuck grassley and onublicans on the same page immigration is the president? no, perhaps in the outcome they are looking for but not the mechanics which president trump is dealing with

those. democrats are increasingly uneasy the president would shutdown the border and raised tariffs on autos by 25%. ultimately, this will calm to does come down to how far the president is -- come down to how far the president is willing to go. dhs ising manager of perceived on a policy standpoint as being more moderate than secretary nielsen, so the development that stephen miller is more conservative, it will be interesting to see how he meshes with kevin mcaleenan. critic has been a harsh of the president of the united states. i thought this was especially brutal. the president should nominate the actual mastermind of the administration's immigration policies.

stephen miller went so far as to describe emma lazarus' poem on the statue of liberty represents the spirit of america. let the puppet master come out from behind the curtain. what is the mix in the coming days of mr. miller in the white house and dhs? can he get the job done for the president? think bobean, i mueller -- stephen miller for his part as someone who used to be an immigration aid to senator jeff sessions, but then was plucked and put onto the campaign and is the policy advisor. in terms of the development, not to model two stories, attorney general william barr is set to testify today at 9:30 before the house appropriations budget committee. this will be the first time --ce the release of the

the democrats, this hearing is going to be fire for lack of a better word. francine: talking about fire, we understand the u.s.-e.u. trade war will escalate with possible retaliatory tariffs. what does that mean in terms of why president trump is doing this? does he want to be seen as picking a fight because he is closer to china, or is this because i believe the subsidies to airbus are unfair? kevin: they believe they are unfair, and the administration is very much not going to be backing down on this. you saw this really with the threat via tweet earlier in the week and an escalation with tariffs and mexico. if you look at the

recent wto ruling against russia , i thinkal security that was a sign of things to come where the administration is truly not going to back down at all in terms of the escalating trade tension between the u.s. and europe, so get ready. as they wrap it up with the chinese, it will be additional for europe. tom: extraordinary events in europe. .- washington a conversation with the senator of iowa, chuck grassley, on his president and the immigration policy of the united states. this is bloomberg. ♪

♪ bloomberg "surveillance," francine lacqua in london, tom keene in new york. let's go through your wall of worry and throw up the ibbotson chart. i use the dow and not the s&p 500. inre were you in your fear 1931? gloom.gloom, matus curve. -- drew: we are not equity people

per se but risk assets, if you are optimistic on the economy and the consumer, there will be points of opportunity around those. , from an investment standpoint, we have been trying to avoid what we can avoid. you see trade uncertainty, things like corporate bonds, some of those you want to and void whereas structured finance -- avoid whereas structured finance and others -- inflation moving up above 2%, so you are looking at a 5% nominal gdp reading this year. if you are doing everything ok, not even well, that is your baseline revenue. tom: your worst nightmare at metlife, someone is going, how much aramco can we get? is the demand for this initial

arabia, $80th saudi billion is how much is out there . it is a demand for paper and yield. drew: there is a wall of money and finding good value is difficult, so we focus on it a lot. we are an insurance company so we can do things a little differently, and sometimes we can trade liquidity for yield. we are talking about our assets and liabilities and thinking of how long the durations are. we can take a longer view and often times the value is in taking that longer view. francine: if you look at bond prices around the world, which is the one that will change first? is it german yield, something to do with treasuries, or the italians? drew: i would look to the u.s. on that one. i think the u.s. has more potential to disappoint or surprise people, particularly on

the inflation front. i keep coming back to that, but for those of us who like history, when you look at the 1960's in the united states, there are a lot of corollaries now to then, and we all know what the 1970's look like. we have to bear in mind we think -- we have to bear in mind things could go wrong even when we think nothing can occur. we have to keep and i on u.s. 10 year notes and where the expectations driving those yields may come from. francine: is the strength of the u.s. economy almost 100% correlated with what is happening in china? the: if you look at correlation of growth between the u.s. and china, it has been declining. the u.s. has decoupled a little bit in part because of how strong the u.s. consumer is. if you look at the amount of debt they have come of the debt

service ratios, the income, the fact that if they got fired they would easily find another job, and that we are starting to see wages move higher, that has consumers in good shape. upper income people are concerned about what their actual tax bill is. tom: we do come to the end of the u.s. tax filing season, drew matus minding us. power,"p on "balance of a conversation with libby cantrell of pimco on america's immigration policy. ♪

♪ "surveillance," prime minister may in berlin. just published moments again over the combined area of

republicans and democrats on the 18 hours ofe last presidential purge of the department of homeland security, that is front and center for our washington team. our first word news. viviana: the amount first saudi aramco -- demand for saudi aramco's first bond offering is skyrocketing, receiving $80 billion in order. that is a rare situation for a state owned company, marking a turnaround from last year with wall street briefly shunning saudi arabia. chairman carlos ghosn says there is a conspiracy against him. he recorded a video message against -- before his latest rearrest. >> this is a conspiracy. this is not about specific events. this is not about greed. this is not about dictatorship.

this is about a plot, about conspiracy. execsa: he says nissan were afraid the merger with renault would hurt them. felicity huffman is among a dozen people to plead guilty for the college admissions scandal. many of the parents are making plea agreements that include minimal time in prison. prosecutors will file more charges against others. tech,ia beating texas 85-77 in overtime to win their first title. jim chanos beating out others. global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries.

tom: we are scrupulous when we "surveillance" mistake. i need to state for all of isginia tech, blacksburg where virginia tech is, not richmond. i failed. viviana: thank you for covering for me. , certainly,night congratulations to the champs and a good effort for texas tech. francine: for those less familiar with virginia but more familiar with the u.k., let's talk brexit. theresa may arrived at the chancellery for talks with angela merkel a head of the special counsel in brussels. we saw her go in and reporters were yelling, go back out because we want a photo

are,tunity, so there they shaking hands, smiling to the camera -- tom and i do it all the time -- and then go back in. tom: absolutely stunning. we have a good one on brexit. francine: i am thrilled to be joined on set by rob hutton. he is usually part of the westminster lobby. what is going on? why is theresa may going to these european capitals? is it a message back home she is in charge? rob: yes, a bed of rolling the pitch ahead of tomorrow's meeting in brussels. she is going to berlin and paris. this isguable that about what is going on at home. it is about saying, i am still

negotiating, i am still prime minister, because the deal is being worked out in britain's absence in brussels. our colleagues report that probably tomorrow, may will be offered something up to just under a year around the start of april 2020, and that will be what they are offered and probably what they will take. francine: what does that mean for what happens over the next 12 months? what is the point of the extension? and she won't say this, they may not actually directly ask her, but the point of the extension, they have always said , is something needs to change and what is going to change is that she is going to go. when she originally announced her resignation, she said she would go when she had got the deal sorted out, but having put that out there, that will happen

. the moment we get to a week where there are not five crises this week, she will be told by her cabinet if she has not already been told by backbench tory mps, it is time to put somebody else in charge. they have a leadership contest and shoot another leader -- choose another leader. they probably cannot get anything through parliament and there will be a general election. that is my best guess. maybe they will have something parliament will agree to that the e.u. will agree to also. realistically, something has to change so we might have a general election and a second referendum. wouldn't that be fun? francine:[laughter] tom: discuss this administrator's taking control

of debenhams and what that means in the retail spirit, given this brexit soup? francine: we found out in the last couple of minutes that they now have administrators. notuld suggest it is unique to the health of the high street but to debenhams. it was one of these ailing shops. i do not think many people went, which is why it explains white was doing so badly. headline, united kingdom prime minister may said to plan brexit statement on thursday. how close will she be to a no deal? rob: that depends on what happens on wednesday. it feels like no deal has gone off the table. last night and parliament, they passed a law that is supposed to

stop a no deal from happening, unfortunately that's's is not within parliament power -- that is not within parliament's power. it gives them a chance to tell her to go back and get a longer extension. i think what will happen is the e.u. will offer an extension on wednesday and thursday the prime minister will come back and say, i have this extension and tory mps will be upset, but everyone else will say thanks for that. tom: maybe it is a flexible extension. the chancellor of the exchequer talking it up right now, certainly mr. hammond would like an extension. on thursday, does the prime minister resign? do the tories revolt and say, you got an extension, you are out? rob: anything is possible.

every prime minister wants to have an elegant landing, departure. tom: mr. cameron. rob: not many have them. tony blair just about came closest. most are booted out before they want to be, and she could well join that. i cannot see her getting elegant landing. she will come under extraordinary pressure to announce a departure schedule and let tory mps, who are already frankly maneuvering to succeed her, let them get on with having a proper fight. francine: i am going to the imf with tom on thursday and friday -- friday. will i be able to come back into the country? will the deal be off the table? peoplever say never, but in parliament have pretty much

stopped talking about no deal. in the run-up to the last cliff edge, i remember about a week ,ut people started saying haven't actually worked out, we are not going to do this. this time, it feels like they are pretty confident. the main thing that can go wrong is the e.u. can turn around tomorrow night and say, we have just had enough. just go. none of the mood music coming out of brussels suggests that will happen. hutton, really appreciate it, exhaustive coverage by our brexit team in london. much more coming up. this is timely. i will speakhour with the chief economist of the imf, the imf taking a lot of shots about the world economic

outlook. we will talk about the view. this is bloomberg. ♪

viviana: more job cuts at tesla. bloomberg learned the electric dismissed-- carmaker several members of its sales team. tesla is shifting its ordering process online. fundgross's former mutual has shrunk by 70%. the drop was mainly caused by his redemptions of assets, plunging from $830 million to $232 million in march. gross announced he was retiring

after 48 years as a money manager. one of the world's largest asset managers is purging investors to bet on emerging markets -- urging investors to bet on emerging markets. >> we absolutely believe the emerging markets are where most of that growth will come over the next decade, so i spend quite a bit of time in asia, and we are investing across the region. we think most investors are not exposed enough. viviana: that is the bloomberg business flash. tom: time to rip up the script with drew matus at metlife. he just got off the plane and got a real look into japan and all the fear about the japan-ification of the west. nominal gdp in japan and the great roller -- rollover of the

fiscal crisis and back to lethargy on nominal gdp. should we fear japan-ification in europe or lethargy in the united states? drew: i do not think so. the u.s. certainly doesn't have -- europe is a little closer. the u.s., it boils down to the productivity story. in europe it boils down to the fundamental reform story. europe is europe is the best way of saying it. it almost seems like they are willing to grow at a slower pace to maintain the culture they want to have, whereas in the u.s. we have always been able to tolerate more volatility as long as the average is higher. i would rather be in the more volatile, higher growth rate scenario. tom: there may be and argue about where terman earl value is

best terminal value is for economic growth -- terminal value is for economic growth. expectations.h will politicians exceed -- succeed with this new low terminal rate? drew: as long as it is driven only by population dynamics. the decline will be a lot less, and my view is that this is purely a labor market story. on the productivity side, you will see productivity in line with the best numbers we have seen in the past once we get the economy fully up to speed. that is where the tax cuts have been helpful. we were operating below normal for a while and if you gear the economy to run at a certain rate and start running below it, your productivity numbers are really bad

so you need something to jumpstart the car. i expect that will pay off in the long run. francine: drew matus joining us today. speak withext, we martin indyk. willl at the polls, we discuss the impact for the wider region. this is bloomberg. ♪

♪ francine: thisfrancine: is bloomberg "surveillance," tom and francine from london and new york. decision time for israel, they vote on wther bjamin netanyahu will face another term. he has been tainted by corruption allegations and faces tough opposition. could he put himself on course to become israel's longest-serving leader? indyk, us as martin former ambassador to israel. what do the people of israel vote on today? when they are casting their vote, what do they think about? martin: it is basically a choice

between continuity with a prime minister who has basically kept them safe, cap the economy on a positive course, and on the other hand, a prime minister who has been there possibly too long , tainted by corruption, and whether it is time for a change to a group of generals essentially led by benny dance provide ano alternative to a new, cleaner leadership. francine: how has the campaign been leading up to today? martin: it has been vicious and nasty, devoid of substance. i fear what we will face two years from now in the united states. the issue has been about netanyahu and not on all about issues -- not at all about issues of war and peace or

housing. anything of substance seems to have slipped by the wayside as they have engaged in a character assassination match. tom: as the israelis go to an toortant election, i go back november 4, 1995 where there are and the assassination of rabin. situation?nother during theas there time of rabin's assassination and it was a real tipping point in terms of issues of war and peace. at this point, there is not a lot of interest in a major change in policies. z, the leader of the opposing party, is not offering substantive change.

tom: you look down the sea of galilee and there is a motion. many americans are removed from why that piece of land matters. what did the president with his latest comments do? martin: it is the high ground and for israelis, it is regarded for credit -- is critical to their security. five israeli prime minister's have offered for withdrawal from heights in the context of peace with syria. what president trump did was asognize israel's annexation sovereignty and it contra vents a basic principle of international relations which is the inadmissibility of the acquisition of territory by force. if we go down that road, then forcecan take crimea by

and that has to be accepted. francine: what are the wider regional implications of the is vote today? martin: not in yahoo! has managed to take the relation -- netanyahu has managed to take the relationship between israel and the gulf states out of the deep freeze. with a strongck was already -- majority, he may be able to continue that. if he does win, he will be dependent on right wing extremist parties pushing him to annex the west bank, complicating his relations with the west world. francine: has the economic policy put in place by the current government played any role in the campaign? martin: overall, israelis feel today that life is good. their economic situation has

been handled well by netanyahu. i think it is important that he gets credit for that, together with the policies of the bank of israel. they really have avoided any major recession over the last 10 years of his rule, so overall people are feeling good about their economic situation, even though things like housing and education have been suffering. tom: help us with a democratic to an election in 2020. what is the most productive way to accentuate their linkage to the jews of america, not so much israel, given a president who says this is what i believe? candidatesdemocratic adapted 2020? martin: the majority of american views -- jews are -- vote

democrat. we are talking 70% to 75%. democrats naturally appealed to the jewish vote looking to be seen as pro israel. however, there is a divide opening up between the american jewish community, the bulk of whom are liberals and progressives, versus the right-wing parties in israel. not recognized by the ridges lead dominated governments of the recent past. if that considers after this election, the split between the israeli government and american jewish community will grow larger. that puts democratic candidates in a difficult position. several of them over the last couple of days when netanyahu said he will annex settlements in the west bank, actually

denouncing him as a racist, something i do not think we have ever seen in a democratic primary. tom: we look forward to having you back as the election rolls forward. , a distinguished fellow in terms of service as ambassador of the united states to israel. crimea may be a theme at a nordic summit, coming the leaders ofh arctic europe. stay with us. this is bloomberg. ♪

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the eu valves retaliation -- retaliation. and drug prices on parade. giants of pharma to testify before the senate. david: welcome to "bloomberg daybreak" on this tuesday, april 9. it was about midnight last night, which means and i didn't get to see it. alix: but one of our producers did. david: of course, virginia won the ncaa championship. for our importance here at bloomberg, we have to talk about brackets for a cause. jim one for his cha