nejra: good morning. i am nejra cehic with manus cranny. this is daybreak europe and these are today's top stories. over to draghi, no room for complacency at the ecb as italy's economy falters and the imf cuts it level growth outlook to the lowest since 2009. we get fed minutes tonight. danger zone. the u.k. might be forced into a long brexit delay but could amend or macron impose a series of extra demands? we are live in brussels. ever could seek about $10 billion in what is expected to be one of the biggest initial share fails of all time.

manus: good morning and i am live in abu dhabi, we are rolling and we have had conversations from asset management but the lineup continues through out the day. i am speaking exclusively to the carlyle group in just a few minutes. doing deals and getting a check from the region. a president ofom aston martin. how are they doing in aston martin land in the region? that is later this hour. 7:30 a.m., you do not want to miss our conversation. he is in splendid form, the ceo of the texas investment.

ixis investment. and we will be speaking to aberdeen sort -- aberdeen ceo.rs's he knows a thing or two about navigating change. nara, good morning, a cracking day for the team in upper darby. nejra: it is, great to see you. you have been rubbing shoulders cannot wait for those interviews you have coming up. what a whopper of the day for you. globally it is a whopper wednesday. monetary policy watchers and economic watchers and political risk watchers. we have the ecb decision, we have cpi data out of the u.s., we get fed minutes, and we have the eu summit where brexit will be discussed. a delay of up to a year. yesterday we saw u.s. equities dropped for the first time in nine sessions. the s&p 500 closing lower by .61

percent. futures flat, the seamen european futures. the dollar-yen goes nowhere. pointing outen volatility tends to be some dude inapril and bounces back may. we could see a stronger yen if that happens. we have the imf downgrading level growth forecasts to the lowest since the financial crisis. can see the sentiment effect on emerging markets. equities did gain for nine days but we are seeing'. pause today.ing a watch we are on recession and that takes me to 10 year government bonds. we are back below 2.5%. the juxtaposition is this, guggenheim warming that recession risk has doubled. the prospect of a recession has almost doubled over the next 24 mounts. -- months. i am not worried about a global recession bit worried about a slowdown. bond yields are driving --

dropping in the u.s. the demand for paper last night, $38 billion, paper came to the market. the weakest demand on the second weakest in almost 10 years. maybe it is because of the dollar. let's have a look at the euro-dollar. -- past two past least resistance? bank of america takes the contra side of that trade. that will take the dollar down to 120. the russians do not [indiscernible] uae oiltalk to the minister. is russia really on board with extending these? prudent sounds shaky. let's get into the rest of the markets. juliette saly standing by in asia. bit ofe: we're seeing a a risk off session.

we have seen weakness coming through particularly in japanese stocks. chinese hong kong stocks as well. the nikkei in late trade down by .7 of 1%. quite a bit of weakness from the electronics makers today. elsewhere, it is a typical story of risk off. you have seen bonds generally higher across the region. with the exception of the china 10-year note where you are seeing the yield at 2019 high. pretty flat on the australian share market. looking at the indian share market, it started lower. things turning around. it is slightly in positive territory. let's have a look at stocks, it was all about crown in sydney rising the most on record. it is down substantially in sydney. you have seen crown shares coming under pressure but they back the gaingive they had yesterday which is just that even though when research appears to have walked way from the takeover offer, investors

are betting that the story is not yet over. also seeing weakness coming through from korean defense stocks, there have in some debris of a japanese fighter jet found in the pacific ocean. we're watching the japanese stock, it has that 11 sent stake in lyft. this take to over 20%. that is the best winning streak rakuten.ember 2014 for the u.k. could be forced into a brexit delay. european council president donald tusk has rejected the request for a brief postponement. chancellor philip hammond suggested british lawmakers could revoke article 15 if theresa may fails to reach an agreement. the possibility of crashing out with no deal is keeping one week of employed -- implied sterling

levels. great to see you this morning. good morning. what is the eu likely to offer the u.k. today? anna: good morning to you. it seems as if the u.k. is going to get -- theresa may will ask for a delay. there could be conditions attached and she might not get the delay she is seeking. she wants to delay till the end of june. the eu is more minded to offer something at the end of december, it may be into 2020. that is the key question, how long the delay will be. from the draft conclusions of , theummer -- a summit head eu are to avoid what it sees as a rolling cliff edge. , march 21re in march was the time we assembled to talk about avoiding a no deal brexit. that is something that the eu wants to avoid. they do not want to be here

breezy five minutes talking about brexit. said there is already literally open where inr at home in the u.k. regards to leadership. do we accelerate that, if there is that this long extension, do we go straight to leadership challenge almost tomorrow morning if that is the dig? anna: the length of the application, what does that have does-- the length, what that imply for leadership? has always been where the cliff edges hanging days or weeks away, it still hangs over us. it is this friday if no extension is a great. the conservative party argument goes he do not push the veer -- you do not push the leader back.

there is a big rethink of brexit policy called for, you could see many more making the argument that theresa may needs to go sooner rather than later. she is safe technically. the rules of the conservative party means she cannot be challenged until december. look out for these conditions. you mentioned that the french could demand conditions. the process is raising big headaches for the eu. there is no intermediate membership status, you are in or out of the eu. they are nervous about allowing the u.k. to stay in but members of the erc at home talking about how difficult they want to make life for the eu if they are still members. one mp talking about acting like a trojan horse within the eu. france michael about demands and conditions of this delay. -- france is mindful about demands and conditions of this delay. thes: you have captured

issues at play. anna edwards from the european market open in brussels. thes get to our guest host, head of u.k. rates over at ubs. good to see of this morning. and i has laid out the groundwork of the -- and i has laid out the groundwork. there is a risk of veto. do you think there is a risk of ? veto arising today or guest: there is always a risk of a veto. when you need 27 countries to unanimously agree to whatever is proposed ultimately at the end of today. it seems highly unlikely. you can see the way the markets thereeen trading that will be that situation arising. the best bet remains at this point that we do get an

extension longer than theresa may wants. has been discussing, it will cause a lot of waves domestically in the u.k. but that seems to be where it is settling and there is no signs that many of the individual countries are going to resist. if there are conditions attached to it. since the and of february it has not moved much. 130 .41.are trading at the market may have priced in the long extension but is it not moving much because there could be concerns that a general election is the next risk if we get a long extension? guest: the reality is the full spectrum of possible outcomes remains. the timing is as unclear as ever. if there is a long extension and flexible it is possible the u.k. could leave the eu within weeks or months.

the full range is still there. that is why the currency is still in suspended animation. if you look at it in a trade weighted way, it is near at the top of its range since the referendum almost three years ago. treading water waiting to see what the resolution will be and as long as that goes on, the economy continues to do ok. but slightly underperforming because of the [indiscernible] if holding back business and consumers. manus: that uncertainty has got major economic risks. haverms of protection, we had a host of people say they would not touch gilts with a barge pole. in a defensive play, is there anywhere on the u.k. yield curve you would want to take on board. tension, wen flex t --an extended perio dof

period of time. to seeyou would continue businesses retrenching and consumers holding back from making major purposes -- purchases. a very long extension if it were fixed for two years would lift some of those clouds and you would see take up in activity. this sounds like it will be an and between, neither one thing or another extension for let's say nine months but with the possibility of the u.k. leaving any time, that does not sound like an environment where businesses are able to make decisions with any more confidence so growth will carry in thatring environment. front-end yields will stay low. and mystically, the safe haven bid for -- to mystically, the safe haven bid for gilts will rise. as long as this uncertainty drags on, they will remain anchored especially at the friend add -- front end. manus: you sound more like a

central banker every to my talk to you. staying with the team. guest is thee co-chief executive of the carlyle group. bloomberge in to radio live on your mobile device or dab digital radio in the london area. this is bloomberg. ♪

nejra: this is bloomberg daybreak: europe. i am nejra cehic in london. manus: i am an is cranny live from bloomberg and vest, abu dhabi. i'm joined by the co-ceo of the carlyle group.

welcome to the show. good morning. you have a checkbook out, you have done a deal with our host and you [indiscernible] closer to 40% than you are to 30? down: we will nail this over the next few months. when people give a range they tend to think about the middle. this is a matter of getting the shareholding right. one of the great things about this transaction is we have been working on this opportunity for a long time. they were doing a dual pack, an ipo or a private deal with someone like us. we're happy the ipo did not work because that gives us a chance to invest in a great company. could there be an option, a top up option? guest: will set -- settle on a percentage and go. energy assets, you know a thing or two about energy assets

but the duration is longer. has there been a shift in your duration, or your desire for taking risks over a longer time? guest: not a shift but we are able to hold assets for five, 6, 7, sometimes eight years. we work with the guys in this case, we have an interesting business plan to invest in the business and increase the capacity. while we think we can do that at a reasonable pace. if it takes longer, it takes longer. manus: we have heard from the russians this morning that they are not happy with the [indiscernible] we have seen a colossal move higher in oil prices. where do we go to, we stepping into a new zone for oil prices? target?your guest: we have felt that the risk in oil prices was a spike up, not down. it has a rethink to do with supply and demand. and so what we have seen over the last few years is as new

production initiatives have fallen away, and we have the normal demand growth, demand for oil continues to grow around the world. you have the normal depletion of oil wells, the growth in production is not keeping up. manus: is that -- could you see a shift to over 100 again? 60 two the 70 brent range was comfortable and we have supply and demand imbalance or global developments, its bikes up and so you can see oil spike up from here. we think the natural place and inh the good work from saudi controlling production, 60 or 70 is a comfortable place. we see spikes up occasionally and we are seeing one now. time you satst down with us, both of you are talking about global recession risk. i am the arch grinch of

bloomberg. martin gilbert said i am not worried about a global recession. i am worried about a slowdown. you have you seen, what can tell me about recession or slowdown, which is it? will: i hope your heart grow three times this day. we are not pessimistic in what is happening in the global economy. we are late cycle. baseballerican terminology, we are index trainings and he can go on for a long time. we see from our portfolio and it is a big word folio is continued growth. , high growtht high that everyone was looking forward to last year my but the u.s. economy continuing to grow at 2%, china growing at five and six. europe growing at 1, 1 and a half. those are our numbers. manus: you think we could drop down to 6% growth in china.

much: china grew less -- less than that. the big development have been the recovery in china from much slower growth in the third and fourth quarter last year. is it the triple or cuts in china or is it the pivot to pause in the fed? guest: both have been incredibly effective. chairman powell recognized that the u.s. economy was not quite as strong as they had thought it was in december and they made a decision and moved on it, which i have great respect. i think the chinese government has more levers than any government in the world and they solve real slowdown coming from the consumer and business sector in the fourth quarter. they boosted confidence, change the frigate the tory and monetary from work and have seen real results. worriedf you're not about recession, i am thinking of the various pillars within the strategy at carlisle. i got blown away by the size of

the real estate portfolio. investors, $900 billion. i hope i got the stats right. are you saying or where are you saying the potential for risk in these real estate assets, any bubbles, what do you see, a slowdown risk? guest: one of the great develop men's it was the pivot a number of years ago away from gp driven investing. from office to demographic driven. how do we take advantage of the shortage of housing? how do we take advantage of the baby boomers and what they are looking for from living and candidly from medical services question mark we have seen a big shift in our real estate portfolio over the last three or four years away from gdp driven retail office and into demographically driven medical office, medical supply,

multifamily manufactured housing. it has been a very successful shift for our team. manus: you have been traveling. you have been around the region, you dropped off a check here. you just came back, so have i. what do you make of the bonds question mark the biggest demand for bond offering ever for aramco. it is a stunning headline. what does it mean? guest: it says saudi aramco is a big profitable large cash flowing business and says that the world of credit investing is saying an insatiable demand for yield. and so when you couple the largest cash flow company in the world with the bond issuance that pays a reasonable return, the credit investors fled to it area did manus: are credit investors taking too much risk? are we overreaching for yields question mark is that a concern? guest: have you seen the cash flow for this company?

and so this is a chance to of theat the asset level largest, most profitable company in the world. thee the demand was, it is first time, most people have not seen the financials for saudi aramco like they did here. i cannot contemplate the global demand for this. the bond markets are wildly deep and your choices are things like pay zero,nds that negative rates in japan for the 10-year and so here is a quasi-sovereign issuance that has a spread over u.s. treasuries. manus: i going to put more money to work in saudi arabia? you are in trade with the middle east, what more do you want to do, where do you want to be in saudi arabia? own a fewle we companies in the region, what is clear is the local investors have the edge. they have the relationships, they see the deals long before those of us in washington or new

york or london or anyplace else will see them. we tend to let the local folks do all the deals in the region and we will help them invest in spain and globally. manus: what about china, what more work to do? if there is a trade deal and an opening, are you tempted to do more business? guest: absolutely. we are long-term bullish. we think there will be a trade deal. and the grand scheme of things, the trade dispute has not had a material impact on any of our businesses, and we have had a very strong investment track record. we will do more. thank you for being with us. he will be with our editor-in-chief shortly. a great conversation. that is the co-ceo of the carlyle group, spending money right here in the region with sovereign wealth fund, with an entree into more. coming up, a delicate moment.

that is what the imf says about the global economy. the ball is in the central banks court. ecb decision day and the fed releases their thinking in the march minutes. this is bloomberg. ♪

nejra: focusing in on asia. we are seeing some softness in the equity market. yesterday we saw u.s. equities dropped for the first time in nine sessions. the imf downgrading its level growth outlook to the lowest since 2009. the 10 year treasury yields also moved lower off the back of that. while there is risk off coming into these markets, i said well yesterday when it came to aramco and then we see that number for the orders go even higher getting to $100 billion. manus: it is one of the most amazing stories that ratcheted from when you and i got

together, i was in riyadh monday morning, we went from 30 billion to 100 billion. two conversations i have had, martin gilbert says the pivotal moment for his company and the kingdom, the carlisle ceo, co-ceo just said that this shows demandut the insatiable for yield. that is what it is all about. an insatiable demand for yield. the cause a sovereign cheaper than the sovereign. about we keep talking that hunt for yield and it is interesting when you put it parallel to the treasury auction we saw yesterday which was more muted. that tells you something as well. generally in the tone we have in thesk of coming markets. we have been talking about guggenheim seeing the risk of recession in 24 months has doubled. and when you asked whether you

are talking about recession or slow down, he was a little more bullish. manus: it is a lovely opportunity at moments like this when we get together with various people and get their insights in terms of was it a significant moment like ubs told us we had this dramatic slowdown in the first quarter. cleare group made it create it is not some sort of huge roadblock. martin gilbert said i am not worried about a global recession, i am worried about a slowdown. there's a lovely note by robert es.es -- berg is standingg team by. let's take it to you first. of a resta little bit

at the moment. how's it looking? >> good morning. market are the money not doing a whole lot. you were talking about yields and the demand. no great for -- demand for indian bonds. tradea lackluster day of area did the election season gets underway tomorrow. the largest election in the world for democracy gets underway. fairly muted reaction. you can see higher the any movements for any of the other asset classes. even bonds have been quiet. is active.ace some movement out there. news reports about how one of my largest india automator's have their operations joining hands together. that has gotten that space a bit excited. in terms of news a day before the elections, very quiet. back to you. nejra: thank you.

risk we about the event have going on today, you have an ecb meeting, fed minutes, u.s. inflation, and an eu summit going on around brexit. manus referred to the comment on likeloomberg, it looks equity markets are better than equities, perhaps more poised to sell a negative news, is that your assessment in terms of how markets are positioned ahead of today's event risk? >> the selling seems to be the rise as you say. when of two things are going on. the other events you mentioned, ecb, fed, that might see some investors on the sidelines but the imf, the fed assessment is correct. we are seeing in places like japan are the imf downgraded growth by 10 basis points. the index fell by .6 of 1%. there is an idiosyncratic news going on. still with a macro tone to it. new zealand is the worst performer on the board down .8

of 1%. the deputy governor speaking but was not as dovish as some analysts had hoped. the hong kong dollar, that rally there, 10 basis points against the dollar especially for a currency that is pegged to the dollar. three standard deviations, there is some short covering going on. also some investors chasing the rally in the equity market. they have to buy the dollar there. and the one recovering from some big losses yesterday. and the bond space, the only bonds that seem unappealing to investors today are new zealand. that news from the central bank deputy governor may be hurting the market there. i wanted to talk about china bonds because the yield curve in the blue is the steepest since 2017. of the u.s.en made yield curve flattening. is this the reverse, is this a brighter economic picture question market might not be

that way because tenured notes, -- 10 year notes, low liquidity, it might be bankers buying and holding, versus any economic that happening in this market. roundup.eat and dani burger taking you through the latest. let's get to speed with the first word news with stephen engle joining us in hong kong. good day. stephen: the probability of the u.s. recession within the next 24 months has more than doubled. according to guggenheim partners. economicdeteriorating yield curves. the next downturn will not be as severe as the latest one but might last longer because i'll see makers lack the tools to fight it effectively. britain's exit from the eu looks to be facing a delay of up to

one year. rejectedr donald tusk theresa may's request for a brief extension. he says it will create a rolling series of short delays. they will finalize the link that assignment but a postponement of the magnitude would risk a significant backlash against theresa may. early results in israel show benjamin netanyahu is on track to build his fifth coalition government. -- both sides claiming victory and say there talking with potential coalition partners but there is a clearer path. global news 24 hours a day on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. stephen engle in hong

kong. the imf has cut its outlook for global growth to the lowest since the financial crisis. that says the world economy will expand 3.3% this year down from the 3.5 percent it force on january. the lender sites a bleaker outlook in major economies. >> it is imperative that mistakes are avoided. policymakers need to work cooperatively to help ensure the quality on -- and uncertainty does not weaker -- we can investment. fiscal policy will need to manage trade-offs between supporting demand, protective -- protecting social spending, and ensuring the public debt remains on a sustainable path. nejra: the imf's downbeat outlook comes as the ecb releases its policy decision and the fed publishes the minutes from its dovish march meeting. our guest is still with us. let's talk ecb, let's go

chronologically. most people i speak to do not expect any huge move decisions, discussions. there will be a lot to question. does the market leave that tltro three will get more details or tearing can meaningfully upset their rates of -- upset the rates? john: there has been some concerns around the eurozone. we think things are beginning to pick up. in terms of the supportive policies that ecb are talking about today, we say it is an insurance policy to make sure runs its course. there is no return to the distress we saw prior to this policy is coming in. it is not going to be something that gives growth a big additional impetus. it is more about reassurance.

what is the consequence question mark we can speculate about what he would say, the path of least resistance seems to be on the downside. what will be the consequence of inm more benevolent draghi regards to the bank and tltro's for the bond market, the core european bond market? wherewe have talked about yields are in the bond market, down at zero in the 10 year sector. there are reasons. there has been a lot of safe haven demand for what are the safest sovereign assets in the eurozone, it pushed yields down to that level. we think the outlook is a bit brighter than it appeared in the first quarter and with the support of the ecb and the reassurance we will get these ,olicies to support particularly that weaker financial institutions in the eurozone, there should be a fading of that safe haven and

bund yields will push our -- higher over the rest of the year toward 50 basis points in the 10 year sector in due course. ajra: ucsd per curve and stronger euro. how much do you see that down to ecb policy rather than other factors but we have to move to the fed. we get the minutes later today. for a feds the bar rate cut? will we get any guidance today? john: it is pretty high. ifl be interesting is to see any of the fed voters were in any way resistant or hesitant about the rate hike they delivered in december to give us an idea of that was something in those mines a step too far or too early. to actually see any realistic prospect of rate cuts, you would need something fairly significant happening either within the financial sector or the global basis or financial shock, clear signs of something is going wrong. if the economy continues to push

forward in a lukewarm but positive direction, we have rate cuts that will be credible at this point. manus: one of the stories we touched on is the piece from guggenheim talking about the risk of a recession. almost double was it -- what it was. the consequence of that in terms of the stock market, we are talking about a huge potential free waiting. have a look at this. this is going to show you u.s. as a percentage of gdp. that exonerates to the upside. they warned that there could be -- risk of a massive's massive fallen angel syndrome. fallen angels in the bond market and that creates that doom level which is forced set -- selling into tight liquidity which we have lived through before. is that a real live risk for you? not really. you are talking with one of your

previous guests about the hunt for yield and although there is a pickup in yield in this corporate debt relative to the sufferance, in absolute terms, rates are still historically low. that is one reason why there has been so much money raised, there is a lot of demand for those bonds. they have been funding themselves at low rates. we do not see that as a systemic risk. anything is possible and if you did see a big selloff and a big backup in yields in the sovereign space, any sort of financial pressures building, that is one of the ingredients which we would have to look at distress for signs of building but we do not see any risk of that now. it could be one of those long-distance grassroots guggenheim or were referring to. thanks for the thoughts, that is ahead of the best that is the atd of macro rate strategy ubs. he stays with us.

if you are watching you will be able to get that ecb policy decision this afternoon and the words from mario draghi. nejra: let's get the latest on what is expected to be this year's ipo. 's filing as early as this thursday. seeking to raise $10 billion in the flirtation which could value $120 billion. great to have you with us. talk us through the timeline for the ipo and tell us how the yft.ation compares with l to filepect uber thursday. they are planning to take investors' orders sometime this month and lyft by may. earlier in the process, they have been talking about

valuation of up to $120 billion. -- lyft has a different market cap. people are looking at the u.s. and canada market. lyft does not have that much of a global footprint. that may be the market where people compare them. manus: it is all about the comparisons and where people want to place their money. reporterur asia deals with the latest. coming up, we speak exclusively aston martinent of in the middle east and north africa. from this, the bloomberg invest summit in upper darby. -- abu dhabi. this is bloomberg. ♪

nejra: this is bloomberg daybreak: europe. i am nejra cehic in london. manus: i am manus cranny. at abu dhabi. this is the luxury end of the world. the carmaker aston martin, the stock is been under pressure dropping 5%. the british company said earlier this year that some buyers in the u k and europe are dealing amid uncertainty around brexit. one man who can tell us how the business is doing his part of the president. good to see you. things are a bit tough in the

u.k. the new model is shiny and sparkling. how is demand? >> we launched three new sports cars. -- it has been a great reestablishment of the sports car range. a service for, aggressive sports car. and the flagship super gt. to do averyone wants deal. where are you on the capacity? [indiscernible] >> we're making good margins. market -- new products, we had three new launches in the last three years. hallmark is the

add-on. -- it is the bespoke nature of the product, is that what you see more of? >> the individual customization of our cars [indiscernible] in special growth is vehicles. the limited editions, coming out toward the end of this year and next year. these are high-end collectible cars. that acquire value over time and it has done very well. there is growing demand in this part of the world. manus: people want individualized. you have launched your own dbx. our they coming to benchmark you against the lamborghini or have they met -- of the mind that yours is the product you want?

guest: there is room in the market place for all players. manus: i want to know how much room there is for you. we have an exclusive audience. the car has been received very well. carsve the owners of the you mentioned. we are happy with the nation -- the niche world. the carthy end of this year. when you see the car that [indiscernible] we should go for a spin. on a more serious note, what times do you hope to achieve in the u.s. -- in the suv market?

it is a significant growth curve we looking at for the region. around here and see how suvs do in this market. launch,ou mentioned the just give me a little bit, what your ambitions might be in terms of my you won't give me numbers, [indiscernible] >> we have limited production. we released the first details and 16 and overnight, we were sold out. especially in this part of the world where we have some [indiscernible] they're out it will be a the-in-a-lifetime thing, way the world is changing in the future, that car will not be

producible engineering wise in the future. it is a once-in-a-lifetime. isus: the trophy asset, it the look of the car. i drive past them every day on the way home. appeal.hat electric vehicles will be the biggest challenge for everybody. people coming in and saying i would like an aston market? are they asking for the engine? guest: there is the full-size suv. we believe we can [indiscernible] by do it differently bringing in the autonomous vehicle.

it is significant and unique in the marketplace so the kinds of car we show in geneva and last year that is establishing it in the minds of the new generation which are asking for something different. manus: i ask you about the demographics in terms of this region? is it a broad church from: else their father, where is the demographic? guest: we are seeing a younger buyer come through. the days of the flashy gold sports car, you will still see some around but it is changing. the market is becoming more diverse, it is becoming more attentive to the world and we believe that is great. the aston martin is a more conservative sports car, more understated. the beauty of the car is

important and we see the demographics switching around to our kind of car and kind of product. we are seeing a lot more globally educated individuals buying the car in this part of the world. manus: the strongest younger fee for you in the region is? >> the uae. the strongest market. manus: thank you for being with us. i suppose we have a couple of projects, we have to dry one of -- drive one of these cars. the demographic includes the producer. thank you so much and enjoy the day. great to have you here, great to have an insight in terms of what is happening with the business. there you go. have got a convertible. it could be fun. good morning. nejra: much more glamorous. i wonder if you are good either.

i look for to seeing that. i would be looking forward to the day ahead. areaed minutes coming up we are talking more markets. you can see all the charts we have used on g tv . this is bloomberg. ♪

♪ from: good morning bloomberg invest abu dhabi. this is "bloomberg daybreak: europe" and these are today's top stories. there is no room for complacency at the ecb as italy's economy falters and the imf slashes its global growth outlook to the lowest since 2000 and. danger zone -- 2009. danger zone. the u.k. may be forced into brexit delay, but could emmanuel macron be forced into new demands? about $10 seek

billion in what's expected to be one of the biggest initial share sales of all time. ♪ >> good morning, everyone. we have got breaking news coming through. let me bring you the numbers. first-half pretax for the online retailer comes in at 4 million pounds. 5.4 million was for pounds. first-half revenue at 1.3 one billion pounds. first half operating profit, 4.5 million pounds. it is keeping its full-year 2019 reported sales and ebit guidance. analysts were looking for any outlook on the margin to see whether it anticipates any recovery in those margins, but

also the u.s. and focus -- and focus -- in focus. let's move to tesco. is well on track to meet its target. booker synergies fourth quarter like for like u.k.'s sales for up 1.7%.1.7% -- the other thing analysts were looking ahead to with tesco was whether there would be a possible update of its cost-cutting plan for the u.k. business, where it plans to eliminate as many of 9000 jobs. in terms of what we are getting through, it is confident it will meet its remaining goals in 2019 and 2020. we will bring you any more lines from tesco as we get them. you are in abu dhabi?

manus: i am in abu dhabi. do you know why i miss tesco? there is an ipo that we will bring you in the bit of a flash price on. 's a.p. international orders come in -- ipo orders tenths per share. this is part of the msnbc family. this is the ipo we have been waiting for. .hat is the pricing if you want a bit of payment process, get on board. what have we got? i will get back to dubai tonight. the bloomberg abu dhabi

investment in 19. we have got the interviews -- 2019. we have got the interviews, more to come. up for anheading exclusive conversation with the chairman of aberdeen standard investment to talk about the roadmap to success for asset managers. everybody is reviewing what they are doing. you will be able to pick up that continued conversation on lake go -- live goat. -- go. nejra: i cannot wait for that. let's get back to some of these tesco lights. the red headline -- lines. the red headline, fourth quarter like for like u.k. sales up 1.7%. the estimate was for an increase of 1.8%, so is like this, but tesco is confident that full-year profitability is within their range and they are

confident they will meet their goals in 2019 and 2020. let's get to the futures. yesterday we saw the first drop in u.s. equities in nine sessions. we have seen u.s. futures struggle for direction today. the imf downgraded is global growth forecast for 2019 to the .owest since 2000 an9 , the fed minutes -- today we have the ecb meeting, the fed minutes, and u.s. inflation. let's turn to the bond markets for 10 year treasury yields. we see it move lower today as well. we are down a basis point. 10 year bond yield yesterday close in negative territory. it looks like yields could continue to move lower. i mentioned one of the event risks, the eu summit. the u.k. could be forced into a long brexit delay.

european council president has rejected theresa may's request for a brief postponement. anna edwards is still in brussels for us. what is the eu likely to offer the u.k. today? anna: good morning to you. theresa may has come here asking for a delay. she is likely to be offered a delay but not necessarily the duration she was looking for. avoid danger all the time talking about brexit. they want to avoid it a rolling cliff edge. expect them to talk about flextension, something like a deadline, but you can go earlier if you managed to get the withdrawal process agreed in parliament. expected there to be lots of

conditions attached to this. the french are concerned about what kind of member of the eu the u.k. will be. what kind of member of the eu will the u.k. be if it is on its eriodut for a prolonged p is essentially what they are concerned about. they seem to point out that there is not a such thing as an intermediate member. they will be expecting the u.k. to stick to a number of guidelines, not undermined the proper functioning of the eu. expect all of that to be much talked about in brussels. nejra: thank you so much to anna edwards covering the story brussels all day. joining us on set is jordan rochester, fx strategist at nomura. great to have you with us. good morning. i know you will be watching the headlines closely. you said that in a quote about

all of the event risk today. what sort of delight are you expecting -- delay are you expecting? jordan: the good news is that the uncertainty of the delay should be low. last time theresa may was supposed to be sending her this. requesting they had no ability to shape the debate really. they had a few hours to submit things to the eu leader. at the dinner themselve -- dinner itself, the eu leaders that up.- tore it seems pretty much a foregone conclusion that there will be a ex-tension.l the eu could attach some more aspects to this extension we have not even considered.

we did not think april 12 would be a day last time, so we could be surprised. nejra: if we take a look at the cable chart, it's barely moved since the beginning of february. do today's events have the potential to shake cable out of this range? jordan: it does. if you are a corporate and have to hedge your sterling exposure, you have to hedge for all of these brexit dates. downside have to biuy protection can sterluy -- buy downside protection in sterling. you can see that exposure come off in the short-term. you will see parts less than thand -- puts less demand. nejra: do you expect short-term volatility to increase? jordan: this is a volatility killer.

anybody who wants to belong volatility or thinks something will happen, there is what happens with the eu and what happens with the u.k. theresa may once hinted she would never extend article 50 this long. eu elections are late may, so perhaps she stays on. if we get a resignation from theresa may, that's a completely different ball game, volatility she tired -- shoots higher. it will still have a premium to euro-dollar because of brexit. the bank of england could still raise rates later this year. there is still more of an idiosyncratic story to the u.k.. nejra: what is your assessment of the risk that we actually get a general election? jordan: both parties have been

told they don't have the kim pine -- the campaign financing to hold an election. you could have a low-budget one. the polls suggest a home parliament -- hung parliament. they can move. the tories could elect a new leader and then hold a general election. theresa may said she would not take her party into another election, so i doubt it will be theresa may who does that. who becomes the new tory leader first? it will be a harder brexiteer. it's 50-50 whether you get jeremy corbyn on the prime minister -- as the prime minister and the pound was lower. the uncertainty of the outcome of the result, you are either a hard brexiteer or jeremy corbyn. there is not much upside there. nejra: jordan rochester stays with us. let's get the bloomberg first word news. aramco has issued $12

billion of bonds in one of the most oversubscribed debt offerings in history. it allowed the energy giant to borrow at a lower yield than saudi sovereign debt. this sale raised money to finance the kingdom's economic agenda. the ipo of aramco was postponed last until at least 2021. is reportedly seeking to raise about $10 billion with its ipo. they could file as soon as thursday and begin trading in may. the public offering is expected to be the largest in the u.s. this year and could also be among the 10th largest of all time. the fed vice chairman suggests the current low levels of unemployment in the u.s. may be sustainable. his comments, despite concern it may spark runaway inflation. declining unemployment has been on important factor in the fed

deliberation in recent years. 7:00 p.m.inutes, at u.k. candidate -- u.k. time today. global news 24 hours a day, on-air and on tic-toc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. ♪ nejra: stephen engle in hong kong, great to have you with us. benjamin netanyahu looks set to sail to a fit term. it seems -- fifth term. brand ofhis nationalism and global stature eclipsed doubts about his integrity. far. coverage so thank you so much for joining us today. what do you take away from the results? were there any surprises? >> there were a few surprises. the orthodox parties here performed better than expected. two largest political

parties gained more seats than the polls seemed to show. natural of netanyahu's right-wing allies failed to pass to go into parliament. netanyahu seems poised for a fifth term. his right wing bloc has a clear advantage as the votes are almost being done counted now. nejra: thank you so much for joining us from tel aviv. coming up, we speak to jean raby , the ceo of natixis investment managers. don't miss that exclusive interview after 7:30 a.m. london time. this is bloomberg. ♪

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7:17 a.m. in london, 40 two minutes away from the equity market open in europe. futures flat. this is "bloomberg daybreak: ."earlier this morning manus cranny spoke with aberdeen investments standard's chairman. manus also got his take on saudi aramco's blockbuster bond offering and the saudi growth story going forward. >> i hope we have. it looks good. it looks as if it has gone really well. investor, and you have seen plenty of bond issues, would you say this is a company to buy more of on the secondary market? >> i suspect it will be too pricey in the secondary market,

but i don't know. if i say to a fund manager to purchase something, he sells it. buy will probably by now -- now rather than self. massivethe demand is so that, from what i read, it will go up. . is this -- manus: is this a seminal moment in saudi as a turning point in the saudi story? you can tag on the bond story. is it a pivotal moment? >> i think so. aramco is killer elite a very powerful -- clearly a very powerful company. clearly the way this has gone must be a real boost to their ambitions for aramco. manus: when you are in various -- r countries

are you seeing any change in the flow of money from the sovereign wealth funds to you? >> i think the sovereign wealth funds are clearly doing a lot better than they were. no, they are definitely accumulating more. nejra: that was our interview with martin gilbert. annmarie hordern joins us for more on that story. is it a hot for yield -- hunt for yield or a play on oil? >> so oversubscribed. what is this about? one case is that it is a hunt for yield and the fact that demand was so robust, aramco was able to price the yield lower than the sovereigns. the bonds that got the most demand were longer bonds, higher

maturing bonds, and that is a play on crude in the year 2050. it was clearly successful. the kingdom was really shocked by global wall street -- shunned by global wall street. this is welcome following the killing of jamal khashoggi. this was a blockbuster for the kingdom. nejra: what will they do with the money raised? >> they say they are doing this to help them fund the acquisition of a local petrochemical company. this is really moving funds from three different government entities, the sovereign wealth fund, aramco. visioned money to fund 2030. they are also testing the waters, seeing what appetite is like. nejra: great to have you with us. thank you so much. the imf has cut its outlook for global growth to the lowest

since the financial crisis. it says the world economy will expand just 3.3% this year, down from the 3.5% it foresaw in january. it foresaw a bleaker outlook. the ecb releases its policy decision and the fed releases its minutes from its march meeting. jordan rochester is still with us. we got a surprisingly dovish ecb meeting last time. let's start with that. not many people were expecting much to come out of this meeting but there will be a lot of questions around tell tro three iering. t jordan: it is a risk on positive story. i have taken quite a big risk in the meeting today. we went long euro-dollar yesterday. g is still too small. if draghi says something that

shows they are moving towards that more aggressive than what the market currently thinks, that is a big euro downside story. today that tearing came in for japan, when they went negative and brought in further policy change is actually the moment of yen strength. it does not always lead to the currency weakening. we saw japanese investors repatriate when the bank of japan did that. we saw foreign investors hunting japanese yields. you can see the same in europe. we are already -40 basis points. it is not a shock. it would be a complete game change for carry trade in europe. nejra: it is interesting, because the argument you make is that if we get the announcement of tiering, it could signal to the markets we are lower growth

rate. the expect that to come through in september time? jordan: we could get to it if the data bounce we see in china does not continue. downgrading the imf forecast makes sense. that's passed information. we have seen german pmi's collapse. we have started to see the chinese pmi's bounceback. there is a tune of lack and what happens to china pmi's and german pmi's. nejra: i did not understand why you would be short-term bullish. >> it's easy to say i am short euro-dollar. everybody agrees with me. usually when everybody agrees with me, that's when it turns out to be the wrong view. leverage hedge fund money is near historical shorts. it is pretty crowded. everybody wants that euro short trade.

will already have seen the fast money kind of take their hands off a little bit. that means euro goes higher. we are starting to see the curve steepening the bit -- steepen a little bit. i think that if the data does bounce, a lot of people might get squeezed out of the shorts. nejra: how would you be trading the dollar ahead of the fed minutes? is just the fed minutes and the communication of the fed has increased drastically. we now have a press conference after every fed meeting. if you do not learn much from the fed conference, maybe the fed minutes. are interesting it is less of an event risk today. if we have more signs about what would tip them from neutral into cutting interest rates, that could have an effect on the dollar. i am not too excited. . nejra: how high is the bar for a rate cut? jordan: you saw the remarks, pretty high.

they are unlikely to simply say -- so the risks are to the downside in the u.s. are they going to start to say we will act upon that? i don't think so. it's not like europe where you are below trend and collapsing. the fed pricing is about 30 basis points or so over the next year. we could be talking the end of the year when this materializes. i think china will bail out a lot of these economies. nejra: i want to ask you about dollar-yen. it has been nor -- negatively correlated with three-month imply volatility. jordan: volatility is near record lows. what makes volatility pick up is when you start to see central banks diverge. not going to happen anytime soon, i guess. when the recession trade happens, that's when volatility picks up. nejra: jordan rochester, great

to have you with us. that is it for "bloomberg markets: european open." -- that is it for "bloomberg daybreak: europe." "bloomberg markets: european open." his next. this is bloomberg. ♪

♪ anna: good morning and welcome to "bloomberg markets: european open." we are live in brussels for the eu's emergency brexit summit. i am alongside matt miller in berlin. matt: today the market to say wait for it, wait for it. traders sit on their hands ahead of an ecb decision and fed minutes, while leaders meet on brexit in brussels and trade talks drag on. the cash trade starts in just 30 minutes time. ♪