good morning bloomberg's european headquarters. this is "bloomberg daybreak: europe." u.s. bankace for earnings season, which kicks off with j.p. morgan and wells fargo today. uber files for a share sale that could be one of the biggest listings of all time. imf, euro zone growth.

welcome to "daybreak europe. 6:00 a.m. in london. we could end this week pretty much flat if not in the red. we are up 0.1 percent. flat on the s&p 500 yesterday. there we are on the 250 handle. we hover around that today. done -- dollar-yen looking for direction. generally struggling for direction as we head into earnings season for equities. out ofo is outperforming the g10 currencies. best performing. crude is on the front foot. also heading for a six the weekly gain. some of the concerns around supply disruption dominating the market at the moment. in terms of ramping up the risk emture, i am putting equities there.

we are down for a second day on emerging-market equities, up 0.2%. -- off 0.2%. lacklustert of a friday. >> it certainly is. we have been awaiting china trade data we thought might come through a couple hours ago. seeing a little bit of weakness in chinese equities in late trade. interestingly, bloomberg data shows a lot of outflows over the course of this week. the nikkei looking good in late trade up 0.7%. a big rise from australia's bank today on the back of a report one of the lenders could be cutting jobs. the rba speaking, saying they are worried about the property market in sydney. in singapore, the amf keeping its tighten policy on hold for now. let's have a look at those stocks. that move in australian banking still led by -- after the

australian newspaper reported the country's largest lender could be cutting up to 10,000 jobs and closing around 300 branches. ruling came through with numbers yesterday. it is up over 7%. we have not seen most analysts upgrade out of the second quarter profit beat. also in korea watching airline stocks up by 13%. the group has made a decision after creditors rejected the group's restructuring. quite a few positive moves. a lackluster session on the final trading day of the week. much. thank you so let's kick off with a slowing global growth story. how can governments and central banks do more to counter the economic slow patch hitting much of the world?

imf managing director christine lagarde said it is essential policy remain competitive. >> we need to have fair trade. we need to have reciprocated benefits in trade. things need to be fixed. at the domestic level where people should not be left -- inyou are 3.3% statistic, terms of priority of order, is that because of trade war with china? >> you have a series of factors that impact our forecast. with many countries around the world. there are specific factors. you look at the u.k.. it is affected by brexit.

turkey is afraid of the moment as well. argentina coming out of the economic situation where it was. look what happened at the end of 2018. all of that has an impact. go from that 3.3 to 3.6%. -- dangerousous it is it, the fed? >> the fed around the world is called different names. the basisl bank has of data. have a mandate given to them. their mandate is going to be ander price stability

employment, price stability only, but they have to really rely on data, numbers, hard data definellect in order to it is going to be best to deliver on their mandate. approacht very healthy that will give them credibility and that will help all economic agents anticipate what will happen and as a result what they can do, how they can organize themselves. christine lagarde speaking in washington, d.c. we see a mixed picture for asian equities that brings to an end a lackluster week for many global market. u.s. and european futures pointing to a muted open this morning. joining us to discuss all of this is peter kinsella, global head of fx strategy at union at --are and the cio

investment management. thanks for joining. the thingsup on christine lagarde was saying. is there a belief in risk markets central banks have the tools to manage slowdown? >> there is a general toectation have the capacity if back quantitative easing. what is not clear is whether trade is delivering the results we see in china and also interest rates have a very adverse implication for economies like germany where savings are rising, not falling on the back of monetary policy. nejra: we are seeing the euro up in today's session. what is your outlook for the rest of the year? theomewhat bearish in dollar. maybe on the growth slowdown i anticipate later in the year.

on the euro, i think you get to levels of 117 consistent with what forbes is telling us. zone, ifok at the euro we see any stabilization in chinese data, the eurozone should not deteriorate. consequently, we have seen -- from euro this year. nejra: the headlines on u.s.-china quiet today. if we do see any kind of deterioration or any affect on the chinese economy around expectation, is the impact going to be greater on the yuan or the risk currencies like the euro or other em fx? definitely on the euro. if you look at portfolio inflows to the euro zone, they have been muted. the only real thing standing to the euro's favor is surplus. where we see that deteriorate, it stands to reason the euro

could fall off a cliff. certainly would trade at lower valuations. nejra: are you looking to add to equity exposure based on risk markets? or is it time to reassess? that in riskserve equities there are still great long-term opportunities. that are able to maintain high margins, able to experience secular rather than cyclical growth -- the premium is elevated relative to history. -- deflation in many markets rather than inflation. we could see multiples rise very significantly. nejra: are you getting more defensive? >> i am not getting classically defensive. what i am doing is saying, where

does growth reside the next five years? grow.re will continue to a number of the consumer staples are extremely well-placed. the resultssaw from yesterday also very well-placed. nejra: if we dig a little more into the em space, one thing that has been interesting and we can see this clearly on a chart is that em fx has not performed as well your today as em equities and also global equities. his em fx telling us something about the outlook for global growth? >> i don't think it is. january em has held onto those gains. that is are flicking two factors. investors were largely pre-positioned. following the fed's policy shift. secondly, a lot of idiosyncratic stories. differentiate.

there are good em's doing very well. turkey you want to avoid at the moment. that is basically what is going on. a much more idiosyncratic story. nejra: james, what are the key risk points you are looking ahead to next week and the week after? >> corporate results are really important. u.s. banking numbers are going to be much port over. i'm expecting a significant downturn. i'm expecting thanks to come to the table. the number of default is quite small. small.ults is quite dames peter kinsella and -- james bevan stay with us. let's get the bloomberg first word news. >> uber is hoping investors will look beyond its $3 billion

operating loss last year to make its case, oversight its preferred metric, monthly access platform customers. the startup says it has over 90 million. some won't --for until the company releases -- reaches $20 million market value. launchplus is set to november 12. disney plus will feature material from its marvel and star wars franchises. it is not expected to break even for another five years. the chief executive is confident about the platform. available to a new technology platform that is simply more modern and i think growing in popularity at a price that makes sense, a user interface that is beautiful, that is why we feel confident. >> theresa may is facing calls

to resign from her own party after she agreed to a six-month delay to brexit. the prime minister now hints she is working on a compromise with the labour party. this could set britain on a path for a softer divorce. may says she wants to leave the eu before may 22. this would avoid the eu having to hold european elections. >> while time is needed for them , it should not be too long. prolonging the pain is not fixing it. >> global news 24 hours a day on air and at tictoc on twitter powered by more than 2700 journalists and analysts in 120 countries. this is bloomberg. nejra: today we are asking the question on mliv, how close is crude oil's ceiling for 2019? reach out to us at ib+tv under bloomberg. we are on six weeks of gains for

wti. coming up, j.p. morgan and wells fargo kick earnings for u.s. banks, capital markets, and credit in focus. when you traveling to work, tune into bloomberg radio live on your mobile device or dab digital in the london area. this is bloomberg. ♪

nejra: this is "bloomberg daybreak: europe." let's get a check on the markets. a mixed picture in asia, but overall, equities to the downside. the 10 year yield hovers around the 250 handle edging higher yesterday. the euro is the best performing

in the g10. cable slightly on the front foot. more meetingsng between theresa may and jeremy corbyn later today. wti on a six the week of gains. concerns around supply disruptions in certain areas, including libya. pushing the price higher despite what we saw earlier in the week. s&p futures on the front foot after the index closed flat yesterday. today we are asking on mliv, how close is crude oil for 2019? reach out to us and the mliv team on your bloomberg. for now let's get the bloomberg business flash. >> spacex has launched its falcon heavy rocket for the first paying customer. the rocket blasted off from the kennedy space station in florida carrying a telecom satellite. it is set to deliver radio and the internet to customers across the middle east, africa, and europe. elon musk tweeted the falcon has

landed. sold japan's biggest ever local corporate bonds. this as billionaire founder fights perceptions about the company's massive debt load. softbank's efforts have not swayed moody's. they are still viewing the bond us junk. fraud in the u.s.. the fund collapsed last year in the world's biggest private equity insolvency. the former chief executive stolen investor funds. another forming -- former management partner remains in custody. boeing says the 737 max 8 is not suitable for certain airports. this admissions from legal documents. they say the upgraded planes cannot be used as -- at high hotspots. says thean for boeing airport can handle larger planes because they have long runways.

that is your bloomberg business flash. thank you. it is first quarter results season for u.s. banks. j.p. morgan kicks off this morning. revenue may for have peaked. morgan cites net interest income figure jumped 10%, though the group has warned it expects little change for this set of numbers. goldman sachs report on monday. bloomberg intelligence sees the top line declining. analysts view its relative strength against the global revenue trend as more critical in gauging the results. key updates on legal risk or cost related to 1mdb will also be watched. bank of america figures are at the following day and the groups trading numbers may hurt the overall revenue picture. industry loan growth in the first quarter could be a positive for the group. bevankinsella and james

are still with us. james, for a while, you have had a preference for u.s.-backed versus european. are there banks in the u.s. heading into the early season you prefer even more? james: i see that as a global giant. it is able to be more price setter than a price taker. i worry about banks that are competing in asia. chinese banks still buying business. i see the flows from hong kong to china, eye watering in terms of the risks. i am very nervous. in europe, i still don't believe many of the banks have adequately addressed balance sheet issues. j.p. morgan is the natural home for capital. nejra: you are worried about balance sheet issues. does that mean you do not seem european banks as a credit

proposition? james: i look at the banks in europe. i see sent in there as an example of a bank that has potential to report very strong numbers, but that is not a european story. in contrast to challenges clearly felt. to make money in negative interest rate environment when passinget to system money across the central banks of europe means wendy bundesbank bundesbank when the provides money, they not only have to provide the money, they get penalized for negative interest rates. how can a bank make money in that environment? nejra: let's ask you about the yield curve. a lot of people say what we might see now is steepening in the u.s. yield curve. are you on that side of the equation? peter: we will have to see what

the data looks like. we did have an inversion quite recently. in order for the curve to steepen, it is reasonable if we start to see growth starting to falter. if we see the fed cutting rates at the end of the year or next year. it is a reasonable proposition. i would not anticipate an aggressive steepening. the large flattening we have seen is pretty much done at this stage. nejra: in terms of the investment banking revenue, u.s. banks but also global banks, what are you expecting in terms of trading? downturn relative to prior results because the fourth quarter was difficult. year on year totals are going to be demanding. we are ready for that. nejra: in terms of how this translates as well in fx, would you view this through the prism of the dollar? the euro? how does the earnings season future?

peter: it does not feature directly, but on the negative interest rate margin in the euro zone. basically, they are considering changing the negative interest rate tearing system. it means paying less toward the the jury is out on negative rates, whether they are useful policy tool. what it means for the euro if we do see a change in negative interest rates should be a little more beneficial. nejra: it was interesting when mario draghi was asked how this might impact forward guidance. he said, i don't know. will the ecb be interfering toward the end of the year? will it be effective? also in terms of the tltros. james: i am expecting more

lending into the banking system. , we are nottiering going to expect any whitesmoke in terms of a conclusion. that there isgree a very high dependency what happens in china because of the expert performance which is kept the economy going. domestic economies are in europe very difficult. brexit, the u.k., everyone says the british economy is in a bad position. we have been outperforming germany, france, and italy. we have not done badly. one of the challenges, what happens in the may elections. will that have a significant impact on the policy agenda across the euro zone? back: we are going to go

to s&p profits expected to fall in the first quarter of 2019. the chart shows we are going off quite a high bar set from 2018. what are equity markets pricing? will there be significant repricing? question on what happens to earnings is so close to equity investment right now. you can make a case where earnings recover where we see decent economic growth and therefore on that basis, if we get higher earnings and a reevaluation, that is the bull case. the bear cases the slowdown in global growth we have already experienced, the lead indicators come through to less strong growth. add news for equities. peter kinsella and james bevan stay with us. uber files for what could be

2019's biggest ipo. it is all about the platform, not the losses. details next. ♪

nejra: let's get a look at the world map. weakness overall on the headline level looking at the msci asia pacific index. below the surface, a mixed picture. joining us from our partner in mumbai and here in london, great to. have you both with us earnings season starting today. we have been talking about u.s. banks. seasona, earnings getting underway with software firms. the main benchmark heading toward a weekly decline. are investors turning cautious? >> yes, they certainly are. it is not just the earnings and

the general elections. but speaking of general -- speaking of earnings, we are looking at where the benchmarks are holding up. services arency advancing in trade. as far as the banking index is concerned, we have not seen too much traction. as far as the indian ruby, -- , this will have an implication on the technology is one ofnsidering it the biggest exporters in india. u.s. futures not showing much direction, edging into negative territory. what about asia? >> no clear direction.

struggling to find a point at which markets want to go. corporate earnings take center stage. the one market outperforming this morning's australia. , theimpending report biggest bank -- japan's nikkei is higher. hong kong stocks are softer this morning. the euro is gaining against all its major peers as it was bought over the daily currency. in commodities, copper is up. crude up 0.4%. crude holding near these five-month highs. in the bond markets, one strategist called it the madness now gripping the bond market. the greek five year bond yield is falling below the u.s. five-year. this goes back to the story we

have been talking about all week. this is a renewed hunt for yields. one strategist saying this is complete madness. it may be 2019's biggest ipo. uber has filed to list on the new york stock exchange seeking to raise $10 billion. total earnings last year fell just under $50 billion as it wrapped up in operating loss. bloomberg basis -- uber faces explaining to investors why it is mature enough to be a publicly traded company worth somewhere in the range of $100 billion. great to have you with us. walk us through the key takeaways. >> $3 billion in operating loss last year. that is on revenue of 11

billion. revenue group quite well. one of the key takeaways we need to keep in mind is that the fourth quarter, revenue only grew 22% compared to 69% in the first quarter. we are seeing a slowdown in growth of revenue at uber. is whether plays out or not growth will keep going to that point where they meet that magic number, economies of scale that puts them into the black. if the slowdown does continue and they can't quite get to that , that would shake investor confidence. the other thing we need to keep in mind is that uber does own stakes in other companies. we say they lost out in china, in southeast asia, they are beating a retreat. at the end of the day, they do have stakes in companies that are doing ok. some of these companies

competitors are losing money hand over fist. it is important to keep in mind they own shares in companies that may one day be worth something. what does the ipo filing tell us about how softbank actually grabbed that? >> what is interesting about softbank, the japanese investment fund, the vision fund is $100 billion of money with investors including the saudi government. they came in relatively late in uber's cycle and they came in as a big stack bully as they have been described. they bought a small stake of 20 million shares, the last round of equity fundraising. they got a whole large stake by basically leveraging the trouble they were having at the company.

investors in solders, executives, they large stakes. the softbank vision fund snapped that up at a relative discount. a big steak very quickly and a pretty good price. nejra: our bloomberg opinion columnist, thank you. let's get back to our guests. kinsella.n and peter great to have you both. i know you always keep a very close eye on tech, not necessarily on this part, but would you be looking at this ipo with interest? >> it is important to keep an eye on all the public offerings. my concern with uber is that indeed it is not going to make a profit for a considerable period

. trying to price something with an uncertain business model in terms of profitability is tricky. i would worry about the other segments. we have had a performance from inustrials and manufacturers the automobile component part players. reallyufacturers are exposed. the shift to electric cars is going to be so challenging. nejra: looking elsewhere in tech , you have interesting thoughts about this. you see parts of tech as a hedge against fed dovishness. >> i would observe there are a number of companies with a capacity for strong results irrespective of the economic environment. very well-placed. software companies like microsoft. i worry about semiconductors. i see some evaluations as high

-- semi valuations as high. i do not think they will catch up in the chips used in autonomous car's to justify the valuations currently being offered. nejra: a lot of people see them as a bellwether for global growth. where are you assessing we are in the cycle for global growth and how that feeds into euro-dollar call? -- into your dollar called? >> we will have to see how that looks in april. , we are not going to improve at the end of the year. we may have seen the lowest at this point. we are basically going back to trend growth in the states. for the euro zone, it will depend upon china and what is going on there.

very slow, gradual recovery in china. nejra: you highlighted a great chart for us, the relationship between the dollar and the potential for yield curve inversion. what does that actually suggest where we go from here? you do see weakness for the dollar the rest of the year, which may be means you don't expect yield curve inversion. >> correct. you do tend to see the global economy doing ok, the dollar can settle because it is the ultimate safe haven. in an environment of better global growth, investors are looking for growth, there will .e better opportunities mildly bearish on the dollar.

>> one of the things i might observe, the near inversion of the u.s. dollar yield curve, the expectation japanese in euro marketsvestors in bond have thought, we can go to america, we can buy those bonds, get a great currency. do you think that is still a factor? >> it has been a factor, -- 2014,rly to the 14 2015 when relative hedge calls were zero. that was fine. a non-dollar based investor is not as clean as it was. one of the interesting trades is looking at chinese bonds. you have decent yield pickup over u.s. treasury. the situation is slightly

different for japanese and european investors. nejra: interesting. comes back to our discussion around the hunt for yields. let me bring it back to u.s. equities. this chart showing stress in u.s. stocks. low volumes point to stocks not being in a stress condition. it goes back to the theme of what people are saying has been a soulless rally. you were talking about the bull case and the bear case for u.s. equities. which one weighs out for you? volumes about low conviction. we are not in a position to really understand which way the economy is going. i think the correct way to play -- aggregates to are at elevated levels and vulnerable to reduction in revenues. hence my interest in companies

like microsoft. equally, i want companies opposed to secular long-term to keep on selling irrespective of their current market. i want my toast buttered on both sides. nejra: you are making us hungry, james. we carry on our brexit conversation. james bevanla and stay with us for breakfast. the south african reserve bank wants to see inflation closer to its target range. we get you more from our interview with the central banks governor next. when you are driving to work, choose bloomberg radio. guess who will be there from 7:30? james bevan. ♪

nejra: this is "bloomberg daybreak: europe." let's get the bloomberg's newsflash -- of bloomberg business flash. >> uber is hoping investors will look beyond its operating loss last year. metric,es its preferred monthly access platform customers. huber's top bosses have a lot riding on the ipo. walt disney's new streaming service will cost seven dollars a month. the netflix challenger is set to launch november 12. the platform will feature kid friendly programming and material from its marvel and star wars franchises.

it is not expected to break even is five years, but bob iger confident. >> a new technology platform that is more modern and growing in popularity at a price that makes sense, a user interface that is beautiful. that is why we feel confident. -- son hand they are ender seeks to reap more profit from a lucrative latin american market. spacex launched a falcon heavy rocket for the first paying customer in florida. it was carrying a telecom satellite set to deliver tv, radio, and the internet to companies across the middle east, africa, and europe. elon musk tweeted, the falcon

has landed. that is your bloomberg business flash. nejra: let's turn to emerging markets. south africa's reserve bank governors has restoring business confidence could boost economic growth. the central bank raised its key rate to 6.7 5% in november. the governor says the current stance or mains accommodative. we caught up on the sidelines of the meeting in d.c.. >> we were very clear about our policies. worried about expectations. two years ago we started

communicating we would like to see inflation slowdown to our target range. most written inflation outcomes is justwn inflation below the point of 4.5. what is more welcome is the fact inflation has adjusted. both five-year and two-year are the lowest in a very long time. for you to have lower interest rates, you have got to have .ower inflation

>> if you look at banks, a lot of them have cost to grow faster than income. construction companies are struggling. would they not benefit from a rate cut? >> i ask myself, would they benefit from higher inflation? they would not. isbelieve the policy rate below our neutral rate. nejra: that was governor of the south african reserve bank at the imf world bank meeting in d.c. we spoke to another policymaker, the newly appointed philippine

central bank governor. he signaled he is ready-to-eat's inflation stabilizers and threats to growth. inflationo ease stabilizers and threats to growth. role, i have to focus on price stability. >> are you concerned? >> no. last year inflation hit 5.8%. right now, it is under control. 3%lation this year will be plus or minus one percentage point. outcome. be the >> that is a more manageable rate.

now you have got slower than expected inflation. >> under the medium-term plan. rate in 15e lowest months. does that make the case for a rate cut in may? we increased interest rates by 1.75%. now inflation is normalized. for relaxation. a possibility, you are going to debate that. what would you say is the chance? what is going to tell you toward -- tilt you toward a rate cut? that will be on the

agenda for the next policy meeting, but we have to look at other threats. because of the el niño -- we have to look at all of this. that was the philippines' new central bank chief on the sidelines of the imf spring meeting. the philippine peso declined, now one of the worst performing currencies in emerging markets. ands get to peter kinsella us.s bevan, still with peter, when you look at the emerging market fx world, how much of your decision on your preferences depends on the propensity for central banks to cut following the dovish pivot from the fed? >> if you think about it like how many have cut, you have seen

the reserve bank of india has cut rates on the back of a decline in inflation. they also had a rate cut last year which was basically politically induced. growth slowed a little bit in india. it is sentiment. the rupee will be one of the laggards. markets will punish those central banks which are perceived to have a large political influence, or are being influenced by political decisions. india is one of the few central banks that has cut rates. most of the other central banks are staying where they are. some talk about a rate cut which may manifest. we might see a rate cut later in the year. it seems to be more backdated rather than a frontloaded cycle. they want to keep a real interest rate spread over

treasuries. it does lead to a currency weakness in em. often when we talk about emerging markets, we make the link to crude oil. we are heading for a six the week of gains. when you look at the price, does that figure into thinking about allocating emerging markets? from a portfolio planning point of view, we are seeing a long-term decline in demand as people heed to houses more efficiently. the demand for plastics is in decline as people say, we cannot have this plastic. given that world energy demand is continuing to rise, the

pricing signal is a green light sustainable energy. investors should be rebalancing away from gas. into sustainable energy, which will be a very high return in years to come. nejra: great to have you with me this hour. an will be continuing the conversation with us on bloomberg radio at 7:30 a.m. u.k. time. coming up, a lineup of interviews. more of them from the imf spring meeting. we will speak to philip hammond and the italian central bank governor. those still to come. bloomberg users can interact with charts shown using gtv . you can browse those charts, download them, take them to your morning meetings. tune into bloomberg radio live

on your mobile device or on dab digital radio. we talk more global markets next as equity futures a struggle for direction. ♪

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>> good morning from bloomberg's european adquarters in london, i am nara. these are today's top stories. looking for a catalyst, market brace for the start of u.s. bank earning season which kicks off with jpmorgan and wells fargo today. your i.p. offerman as filed. uber files for a share shale in what could be one of the biggest listings of all time. we will talk global growth with philip hammond, bruno lemaire zco.ignacao vi nikkei 225 -- [captioning performed by the

national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org >> good morning avalanche. it is just gone 7:00 a.m. in london. just under an hour from start of cash equity trading in europe. it looks like we could have a bit of a lackluster session. yesterday the u.s. market closed flat after that blockbuster first quarter for equities. we could end flat or maybe in the red. futures picking up slightly. you have ftse futures up .2%. we are not actually not seeing pound weighingness. dak futures struggling for direction, and cat 40 futures not giving us direction. the 10 year treasurely yield is unchange the. it edged up yesterday. we are on a 250 handle whoever around there. on that 10-year bond future, not seeing a lot of movement there. same for the others. sterday we did still close

"inbusiness" negative -- close in negative territory. we are going to stabilize a bit today. in terms of focus in these markets, a huge amount of news flow around global trade or that. the focus seems to be turning to the earnings season, particularly with u.s. bank earnings kicking off today. let's check in than ought markets in asia. juliet in singapore has more. we are a little built lack luthser. where are asian markets taking their direction from today? >> lackluster ahead of the start of the u.s. earning season. we are awaiting a um in of the key banks. interestingly we have just had some news dropping on the terminal showing softbank has been selling the biggest ever yen-bond as debt matures there. the nikkei has closed out higher, up by .7%.

a little bit of weakness in china. we have been waiting all day, pressing refresh on the terminal to get this trade data. still hasn't dropped. australia did very well because we had this report that c.b.a., the biggest lender could be cutting to about 10,000 jobs nd closing 300 branches. asx 2 hiccup .8%. overall, a very cautious day's trade. we are waiting to see what happens on wall street on friday. let's have a look at the currency marks because that has certainly been interesting today. the hong kong dollar fell the most this year. fairly stable as you can see there now against the u.s. dollar. we saw the one month interbank lending rate tumble the most this year. that caused some votto tilt. here in singapore, the maf, the latest central bank to turn dovish. we have seen singapore dollar

in tight range. the aussie dollar is up by about .1%. we have heard once again from r.b. affirm. they are very worried about the sydney property prices. they may see sydney property falling further as risk rises. >> juliet in sync more. investors get ready for u.s. bank earnings season. we see a mixed picture. it brings to an end a lack luthser week for markets. a muted open later this week. joining us now is head amir investment strategy at plaque rock. it allowses us to stake stock. looking ahead for next week. what is your assessment on the next move for equity marks from here. a lot of people saying they are going to take direction from the earning season one way or or? >> indeed. momentum has been vlad.

it is important to step out of the immediate kind of day-to-day week to week and focus on the fact that we have had a very good start of the year so far. first quarter was a blow-out quarter. i think at this moment investors are kind of trying to understand is this kind of pausing and passing out, or picking up from here. earnings season is a key thing o watch. >> i have a chart showing basically that volumes have been a little bit soft by certain measures when you are looking at u.s. equities. it led some people to call the rally you have just pointed to a flowless rally. you are the perfect person to ask about flows. has it been a flowless rally? >> speaking to some investors, there are some regrets in not participating as much as they would like to in the rally so far year to date. i would make the observation that the first quarter of flows

have been very much focused on fixed income. the first quarter has seen the record inflow into fixed income each year globally. as for equities, it is selective. s emerging markets taking the lion's share of the flow. the u.s. equity market we saw outflows, and now tess starting to come back in and now in positive territory. >> maybe point to go a bit of lack of conviction in the u.s. equity market rally. in terms of u.s. emerging markets, would that be your press conference, where to allocate for the moment? >> we have an overweight in emerging market equities. d in the u.s. equity mark, underweight in european markets. it is supported by the dovish central bank not only by the fed, but globally central banks posture.g a dovish

it is still early. the momentum is certainly strong there. trade headlines between china and the u.s. is incrementally turning better, and that is supporting sentiment towards the emerging marks. we have conviction and within china, also given the inclusion events they are providing. >> make sense. what about emerging market bonds then? if you look at a chart, judging by their spreads, emerging market bonds not really expensive relative to historical standards. are we going to see emerging market bonds performing ago well. rewe do have a preference for fixed incomes with emerging mact bonds. we expect e.m. sentiment to benefit f.x. as much as it does with equities. in an environment where rates are not going high are any time soon, the need for income is very much persistent.

that should benefit emerging market bonds. we have ot the rally seen in crude. we are heading for a sixth week of gains. we are asking the question how close is crude oil's ceiling for 2019? >> we have the view that crude should stay range bound. it could go $50, and it doesn't make sense for companies to pro. if it goes above, it becomes an incentive for incremental producing. year to date, some of the unexpected supply cuts and expected cuts have pushed the price going higher. but range bound is our expectation. when it comes to crude oil, what is interesting to observe from a flow perspective is that year to date, we saw outflows from omaha e.p.s.'s. we increasingly hear from investors that maybe the way to

play it is not through the underlying commodity but through the oil producers. they are currently trading, if you look in the u.s., trading at a 50% discount versus the broader u.s. market. they are cheaper, but historically the discount is around 38%. so it is cheaper with all price rerebounding. even without it going for the higher issue support producers. >> great to get your thoughts. head of inshares at blackrock. more with her in a moment. for now, snyder electric and the carlyle group are announcing a new global joint venture today designed to develop a new infrastructure project around the world. to them on spoke about the new partnership. >> infrastructure is a huge problem in the world and in this country in particular. call it a trillion dollar

funding gap that needs to be met by the private sector over near team. the classification between our turn and schneider electric to bring central management and automation know-how, software, hardware, but most importantly design, to make everything we do more efficient and more sustainable and more appropriate for the 291st century. that will bring a fair amount of money. what is it that you contribute, and particularly what is it you are designing? what are you going to build? >> we bring you the technology to make all the infrastructure efficient, sustainable and efficiency, that you need for the future. we know that the technology is there. it is possible to do it we just need a different business model, to design and operate these infrastructure. >> do you have any of these projects up and running? >> we have worked on j.f.k.

together. we are working on a couple of things. >> we have one specific example in j.f.k. how does the funding work? how do you put together that deal? >> j.f.k. terminal one, as you know by the public announcement the, we have been announced as the developer of terminal one. that may expand. the port authority of new york and new jersey has imposed some very specific performance requirements on us. ne of them is a level of energy resilience consistent with their priorities in that areas the we need help in the form of schneider electric and others to deliver those outcomes. we cannot do it alone. we need to partner with the leaders in this level of technology, sustainability and resilience to be able to bring it to projects like j.f.k. does it put ent, capital in up front? >> no. this is something where we are helping to develop this, and

the taxpayers are benefiting. but it is directly in partnership with the port authority of new york and new jersey. this isn't a carlyle lone thing -- loan thing. it is in partner ship with locals. that is very fore. about were talking their new partnership. bloomberg news. debra has that in hong kong. >> uber is hoping investors investors will look beyond its $3 billion offering loss last year. to make its case, uber cites its preferred metric that it is platform customers. the start up says it has over 90 million. the bosses have a lot riding on the. p.o. some won't invest until it reaches a $120 billion market value. disney's new streaming service will cost $7 a month. the netflix challenger is set

to launch on november 12. it will feature kid friendly programming, animated moves and material from its marvel and "star wars" franchises. it isn't expected to break even for about five years, but bob iger is confident about the platform. >> making them available on a new technology platform, on a platform that is simply more modern and growing in popularity at a price that makes sense, with a user interface that is beautiful. that is why we feel confident. >> president trump has reportedly admitted he knows her man kaine's nomination is in trouble. four republicans say they won't support his confirmation, and bloomberg has learned that some white house advisors wouldn't be surprised if kaine with draws. spacex has launched its heavy rocket for the first paying customer. the rocket blasted off from the kennedy space station in florida. it was carrying a satellite. it is set to deliver tv, radio

and internet to customers across the middle east and europe. global new year's 24 hours a day, powered by more than 2,700 journalists and annual illses in 100 countries. >> debra mao in hong kong. coming up, jpmorgan and wells fargo kick often earnings for u.s. banks. capital markets and credit are in focus. more on that next. when you are traveling to work, tune in to bloomberg on your mobile device in the london area. this is bloomberg.

>> 7:17 a.m. in london. we are 42 minutes away from the equity market own in yrp. this is day break europe. check on the market. equities closed flat yesterday.

on the front foot on s&p futures. . 10-year yield around 250. cable was higher earlier. we have given up some of the gains, 130.61. some signs the choice may be fayetteville that customs union. we are continuing talks. parliament preparing for recess. e 10-year bond yield still telling tiff. eruo stoxx 50 future on the back burner. let's turn to the media sector now and a battle for streaming supremacy. a gambit to undercut netflix, wall disney's new streaming service is to cost $7 a month in november. it will allow users to story contents foroff viewing. it would include all the "star wars" films and others.

bob iger said he is confident it will be a. disy pixar, marvel, "star wars," national geographic. these are brands that are beloved and have a long history of serving the consumer for many, many generations, and are still popular and still relevant. i think making them available, on a new technology platform, a technology platform that is more modern and growing in popularity, with a user interface that is beautiful. i think that is why we feel confident this is a product that team are background to sign up in droves to have. >> parents will be happy to know that some of animated classics are coming out of the vault and on disney plus? how do you decide what to put where between the chance and the streaming services? >> as it relates to films, movies that are made for the big screen, they will still be in what we will call a

traditional window. that window has served us extremely well, the studio has done over $7 billion in global box office twice just making about a dozen movies. so we have no intention of using this platform to force movies on to the service from a timing perspective any different than they would be available in the so-called pay window. any movie that we make for the big screen will be on the service exclusively from here on out. >> that was disney chairman and c.e.o. bob iger. the battle for video supremacy is under way. ming to under than under cut netflix. how are marks pricing the rivalry? dannyburg ser here. >> if i were to describe how marks are reacting in the options market to this disney announcement, it is a little bit of uncertainty and a little

bit of nerves, especially with the disney plus not said to be profitable for five years. i want to show you options because open interest, investor appetite for disney options has skyrocketed. before this announcement they really pick up. this level right here is the highest on record. white are the bearish options. bearish outpacing bullish. a couple of reasons. that profitability picture looking tenuous, some of these options set to expire on friday. then you throw netflix earnings on tuesday now an added risk for disney. oppenheimer said it should be netflix that should be hedging. i want to give you a view of the netflix pick of options. this is the skew. essentially a measure of how expensive are bearish options versus bullish. this measure has been elevated,

signaling some uncertainty and nerves. it has actually been trending downwards. yes, it is still above this average, but if investors are abandoning some of their netflix hedges ahead of their earnings after this disney announcement, that might be a bit of a precarious situation, according to data, netflix is the eighth more volatile stock on their earnings day, which is is an oddity for such a mature company and a megacap stock. >> great work. thank you so much. we are going to bring you a breaking news line crossing the bloomberg right now. the tokyo court is to extend carlos gomes' detention through april 22. that just crossing the "bloomberg now." we were just hearing from danny looking ahead to next week in terms of media. also it is first quarter result season for u.s. banks. what are we looking at? j.p. morgan, a key driver may

well have peaked. hey saw its net interest margin jump 10% for the last quarter. they expect little change this quarter. they see the top line declining from a year earlier, but analyst view its strength on other updates. other things will be watched. bank of america's figures are out the following day. the group's trading numbers may hurt the overall revenue pick. improve industry loan growth could be a positive for the group. wei is still with us. as we head into this earnings season and you sort of position in a global portfolio, i understand you are taking a more defensive positioning. how do banks fit into yourive all view? >> you talked about net interest margins. that is a key indicator we pay

attention to. in case of the u.s., you look at how flat the curve has been. it will be bit of a head wind for banks earnings. we also see margins in the u.s. most likely already having peaked. that head win will drag earnings trajectory as well. we could see significance earnings slow down versus last year e.p.s. growth. there are one off factors ten beginning of last year. it is just getting washed out, which makes the earnings, revision lower. it puts it? a suitable context. all of this is not surprising because we are late cycle. however, earning is not the only thing that supports stocks returning at this point in the cycle. we have the analysis. stocks will do ok in late cycle. that is why we remain positive. >> let me take you to a chart

that shows the pace at which analysts have been trimming profit estimates. the pace has been slowing, but basically the earnings revisions are still negative, just less negative than they were before. i was going to ask you given what you have just said about your expectation for earnings, what zo you think is going to give further support for u.s. equities? you half answered it you said late cycle you seem to see equity as outperform. do you have faith this rally has further to go even if earnings disappoint? >> yes, we do, which is why we have an overwitte on u.s. equities still. growth is slowing, but it is still growing together with the goldie locks support, the dovish period from the fed should create an environment that continues from the very strong momentum we have seen for a long time now, continue for a bit logger this year, which is why we think u.s. equities are set to benefit. it is become likely owned given

we saw outflows this year and investors are not really participating as much in the rally we have seen. we would see investors chasing some of this performance, which could provide support. >> what other sectors are you favoring, sticking with the u.s., based on your expectations for earnings? >> given the fact we are in late cycle, we have a defensive tilt to towards how we want to be reflective. we look for companies that have quality characteristics that can grow their ention even in late cycle that have low leverage, that has cash on their balance sheets, and all of that kind of lends itself to health care. we want to own health care as a sector and in the same vein, we want to own quality as a sector ahead of marks. >> head of investment strategy at blackrock. thank you so much. coming up from thism m.f. and world bank meetings in

washington, we will talk with philip hammond, bruno lemaire and others. the european open is up next. this is bloomberg.

>> good morning. welcome to bloomberg market, the ian open. we are live from our european headquarters in london. i am anna edward, alongside matt milner berlin. >> the market say hold your breath. stocks and futures trade mixed as earnings season starts in earnest today with results from jpmorgan and wells fa fargo on the way. the catch trade is less than 30 minutes away. [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org >> your pimple offerman as