nejra: good morning from bloomberg's european headquarters in london. i am nejra cehic with manus cranny live in dubai. this is "bloomberg daybreak: europe." signs of improvement as guggenheim says central banks pause pushes recession back to 2021. washington and beijing look to rapid trade talks next month. weakness in china for disappointing numbers, and earnings season in full swing. shakeup at j.p. morgan, a fresh discussion about succession plans after the dimon era.

manus: very good morning to you, thursday morning. how does your risk appetite look? the 10 year government bond yield, if you believe me in terms of no recession until 2021, do you need to buy bonds? do you want to sell bonds? moment, we are fading the move ever so slightly, stronger demand in asia. the yield curve steepening as the economy improves. we will talk about how strong that is, shortly. tracy, wes, i said to hit a nine-month high in terms of futures yesterday.

china's stellar construction will bolster. let's look at those markets, copper and wti. the market will extend its rally in copper and aluminum. a little break on that this morning. wti back to the green. u.s. stockpiles dropped, and bloomberg intelligence says libya could risk and outage up to one million barrels a day. of risk assets, we have to talk about u.s. equities, there was a halt to the rally yesterday. the s&p 500 closing lower. the nasdaq closed flat. .utures down 0.2% we do not see a sixth day of gains are european equities. in terms of emerging markets, if you look at the spectrum, you do

not see much on a headline level. best performing is the indonesian repeat, -- rupee. has gains with the lira, but retreating today. risks of a renewed istanbul election. u.s. sanctions looming large. let's check in on the markets. great to see you, what are you focusing on? >> you mentioned there is caution. .t is a long weekend coming up we are looking at declines across most markets. indonesia.ception of volumes are on the lighter side. you had announcements in china about continuing support for the economy that has fallen on deaf ears.

down korea is substantially, 1.3%. simply because it is a dovish tone, but they have said how bad the economy is doing. pulling thetronics index down. look at these movers. samsung, problems with the foldable screen on the galaxy fold. they will investigate that, but launch it as scheduled. indonesia, we talked about that. semiconductor,. all flights being grounded, suspension of operations. down 27% in india. nejra: thank you so much. latest fed beige book survey, the u.s. economy grew at a slight to moderate pace in

march. similar to the previous report. manufacturing conditions were seen as favorable despite uncertainty about trade. u.s. stocks fell to a one-week low. meanwhile, guggenheim partners is forecasting the fed pause is pushing a future recession back. ,> now that we have this pivot that is taking pressure off, and we are starting to see the economy in the u.s. being reinvigorated in housing, areas that had been under cyclical pressure. the bounce back in the economy going into the second quarter will be strong. react tod does not that, which i do not think it will, it pushes the recession risk further into the future. and maybe we will not see the recession until 2021. nejra: joining us now is janet mui, global economist, casenove

capital. goldilocksn this situation continue? janet: i think as long as the federal reserve can stay patient , it can remain quite long. we see the latest labor market employment u.s., growth is strong. inflation remains subdued as well. helping the economy to gain momentum. the health care market, we start to see a sign of recovery. and the financial conditions have rebounded. looking at morning, , tracyart we had earlier alloway and myself, green sheets are everywhere. how strong could the second half

be? the fed believes you are going insee continuing improvement the economy. how strong could it be? janet: it will be a modest , but i do not think it will be as robust as 2018, because the fiscal stimulus is probably over. it will be very robust, but it will be a modest recovery. are we right on the 10 year treasury yield? if you look at that, it is as if the march meeting did not happen. we are back where we were before the dovish tilts the fed. are we on a 257 handle? janet: we could see further upside in the u.s. 10 year treasury yield.

it was pretty pessimistic. think the markets, although the fed may not raise interest rates, if data does rebound in the second half, or if inflation does pick up, the market will reassess whether the fed needs to change its guidance. there is still one more rate hike by next year. there is more upside for the u.s. treasury yield. manus: what does all this due to the dollar? a hoteltold it is like i cannot break out of. i want to show you a long-term trend. volatility over the last 25 years, then we really move. the question for markets is, are we underpricing perhaps, back to 9096 we broke up 10%, are we

underpricing some major economic upside in the u.s.? that could be the driver to break out from this slumber. janet: i think the dollar has remained strong. that has a lot to do with weakness in the eurozone. if the economy recovers more strongly, if the euro starts to appreciate, that would be more volatility back in the currency market. if not, the dollar will stay strong and volatility will remain low. nejra: we mentioned comments from james bullard, he sees yield curve steepening as that economy approved -- improves. and we also heard leverage lending is high on risk. is this high on your list of

risks? leverage itrms of is a concern, not only for our concern but a lot of investors. if you look at the latest, a lot of investors would like companies to use cash to repay of investingead in, for instance. leverage is a problem because every cycle the credit starts to perform worse in an economic downturn. cycle.in a mature it is right to worry about leverage in the economy. bank of america, they think the recent inversion is not something to get worried about. stay with us. that is janet mui, global economist, casenove capital.

she stays with the show. it is the year of the unicorn. itsrest is set to make public trading debut today after raising $1.4 billion. raisedpcoming ipos have close to $100 billion this year. can the hot tech companies live up to the hype. dani burger has the details. $1.5 billion raised, but what do the returns look like? one of the most consistent observations in financial markets, our first day returns for ipo. if history is any guide, pinterest should have a positive day. over the past 40 years, the average return on the first day is 18%. the majority of those returns come to investors who have gotten in at the ipo allocation. if you were to buy at the open, you would see minimal returns

for pinterest. you need to be part of the $1.5 billion funding round to see these games. what about the medium term? so far this year in the u.s., the main easily beaten u.s. benchmark, 30% return, double the u.s. we have a returning of bullish attitudes, tech is hot this year, and ipos tended to be tech ipos. over the long-term, 60% of ipos after five years have declined. outlook from their gets more cloudy. much. thank you so let's get to first word news with debra mao in hong kong. the u.s. and china are aiming to reach a trade deal i early may. this would be so president trump and she can sign it later that month.

teamhite house top trade plans to travel to beijing april 29, that would be followed by the vice mayor returning to washington. is reportedly planning to leave the trump administration. he is finalizing terms and timing of his departure. the departure is not imminent, but others say the former texan governor is considering leaving for weeks. south african power cuts continue, they could bring economic growth to zero, according to the countries central bank. it could lead to the worst expansion figures for the country since 2009. has had rolling blackouts since november. an experimental gene therapy has cured eight infants of the so-called bubble boy disease, and immune deficiency so severe inldren with it were kept total isolation. a treatment to connect -- to correct the genetic defect.

a small pharmaceutical company plans to file for approval. global news, 24 hours a day on air and at tic-toc on twitter, powered by 2700 journalists and analysts in more than 120 countries. this is bloomberg. manus: thank you very much. today, we are asking what will eventually derail the 2019 equity rally? what coulday on spook the market. ? anybodyour grey swan have an idea what a black swan can be? coming up, maybe in may a u.s.-china dale could be ready for president trump and president xi to sign. we will bring you the latest next, this is bloomberg. ♪

nejra: this is "bloomberg daybreak: europe."

i am nejra cehic in london. .anus: i am manus cranny breaking news from leslie, this is a handsome set of numbers. -- breaking news from nestle. one of the strongest starts of the year for mark schneider at nestle. the strongest start is 2016. you saw yesterday, it was all about the water sales from evian. they expect to complete the review of their business by the middle of 2019. the guidance or 2019 is confirmed. this is a big effort to jumpstart the world's largest food company. of deals last year, pricing gains helped them. can they hold those pricing

gains this year? they expect a big review of the oflth unit by the middle 2019. organic sales very handsome, 2.4%. they are holding on to the pricing power for the moment. nejra: it will be interesting to see how the market reacts to those positive numbers in over an hour. let's get to the markets. we are seeing a drop in asia, msci lower. u.s.ll weakness in the yesterday. european equities held up yesterday. the you when retreating, -- the u.n. retreating. manus: that is self evident, no recession onto the back half of

2021. would you want bonds in your portfolio? back ever so slightly. there is slight discomfort with the china data. cents.p three nothing to see here at the moment. let's have a chat with debra mao with your business flash. morgan is swapping responsibilities for top female executives to prepare successors for jamie dimon. lending, themer changes will take effect may want. and the shuffle is seen as a bed to give both women and opportunity. a deal to buy acres holdings, , itfirst cannabis deal

could be announced this week. canopy is the world's largest cannabis company. $1.4 billion raised for the ipo, not compared to social media or a search engine. the company sold for $19 each, above the $15 the $17 range. that is your bloomberg business flash. nejra: thank you so much. a shakeup at j.p. morgan has started a fresh discussion on succession plans. the former ceo of card services comes the group's cfo. another potential successor to jamie dimon takes over as head of consumer lending. to the discussion around women in leadership, it

becomes a question of exposure exposurep visions, and to many parts of the business. ais shakeup gives these women broader exposure. none of the six largest u.s. banks have ever had a female ceo. manus: if you look at the business exposure they will have, joining the operating committee, it is about participation and real decision-making. lake will take over consumer lending. lending and net interest income is driven by that division. they are extraordinary executives and leaders. references toke women, they are executives and leaders critical to success. it is about the changing face of wall street, reflecting back on

mistakes that were made 10 years ago because of a lack of female participation in major decisions at the time. nejra: let's not forget the asset management division, that is something to note. be years awayght from selecting its next leader, but these changes put it ahead of many other major u.s. banks. says, markamie dimon --in used it last week with my demise is gradually exaggerated, mark twain, not me. let's talk about trade relations, a daily sport. the u.s. and china could be close to a deal. there with me, both sides are checking diaries, and that is where the momentum comes from. president trump and president xi

could sign a deal in late may according to sources. president trump: our trade deal with china is moving along nicely. we are asking for a lot of things, and i feel we will be successful. it will be good for both countries. that is moving along well. you will hear about it shortly. waiting. are all janet mui, global economist, casenove capital is still with us. back on what christine lagarde said, a trade .eal could add 3% to global gdp ift would be the consequence and when that deal is signed? you have europe and japan in the background. an agreement of a trade deal will be undoubtedly because we seely

a significant slowdown in global trade. you can see it in the current data and leading indicators. world trade is growing at the weakest pace since the financial crisis. a lot of that is attributable to the trade tensions. it could be quite positive, and it will benefit countries like china, the eurozone, and japan. a muted response and equity markets from the data we got yesterday. was this more good news is bad news reaction that we might see authorities pause on stimulus given what we saw yesterday? janet: i think that is right. the data is encouraging because it reinforces the positive .anufacturing pmi china's economy is recovering. this is usually good news, but because authorities have already

cut the reserve requirement many times last year as well as this measures, asy have ofl as relaxing the issuance the special bonds for infrastructure, the market will be thinking what more can they do? if it really starts to recover more evidently, i do not think the chinese government will want to put more stimulus. worryinghat is markets. i think the rally has been strong. already inod news is the price already. nejra: janet mui, global economist, casenove capital stays with us as our guest host. exclusively to the leader of the opposition and democratic alliance, that is next. this is bloomberg.

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♪ my reference let's look at the world maps. we are seeing a strong red on the asia-pacific index. japan leading the declines, overall a risk-off sentiment in the market reflected as well in the 10 year treasury yields, lower by a couple of basis points breaking news in the european region, third quarter pernaultor ricard, raising its four-year

recurring operating profit goal to the range top. it has seen the profitable grow to about 8%. that is what we are seeing on the outlook, that is what the market will focus on. manus: a big collaboration coming in, this is forward and an engine producer, mahin they will codevelop adra, midsize suv in india, going for the midsize specifically for the emerging market. if it was ever a story that encapsulated the rise and the ascendance of the middle class within the emergent stock market, this is the product that will meet that. the suv will have common mahindra products platform, a combination of technology in terms of delivery. we will keep an eye on that.

taiwan semiconductor's, this is the benchmark, really, for global growth and global demand. --wan said mccumber dr. taiwan semiconductor with a miss on net income. 54.4 billion dollars, the markets were looking for 54.6. , the is a top live go first quarter net income was nearly 5% below estimates. to boost sales, taiwan semiconductor will have to come through a few dark moments of when the major engines lose a little bit of their luster. i love the line there, i leave you with it -- it is a world's most ubiquitous; dr. maker -- most ubiquitous semiconductor maker. nejra: those waiting for the semiconductor cycle to turn, the results will be interesting.

it may cause some concern. some. that we bring you an exclusive interview with less than three weeks until south africa's general election, the countries central bank is wanting them power cuts could bring economic year. to zero this as blackouts continue to cause disruption, south africa's biggest opposition party, the democratic alliance, will be hoping to gain against the party pill you joining us is the leader of the south africa democratic alliance, mmusi maimane. let's start with the issue of blackouts and the projection we have seen from the central bank today. if you were to win the election, what would you do about the issue of lockouts that have been plaguing south africa -- the issue of blackouts? mmusi: i think what is absolutely crucial is that any economy depends on the constant supply of energy. some africa for the last number of decades has been codependent,

which not only is it environmentally unsustainable, it requires us to take our utility and split it into two. one company for the offices of managing the infrastructure and distribution. i think in the distribution market, south africa and to face up for competition. we can allow more diverse energy users to come on board, by ensuring we actually use solar in a more aggressive manner. we have permanent supply of sunlight right throughout the year. solar energy has become cheaper. we need to introduce that to the market. also the opportunity to use hydrogen gas. if you are willing to split up the current utility and allow for disabilities who are sold this to diverse -- four minutes municipalities who are the sole distant bidders of energy, they can pick and choose and avoid these blackouts. manus: we know the challenges

with the electric outages, eight days in a row. the deepest power cuts in a long time. what we want to know, near and i -- what would you do if you have the optionality and power, what would you do with the debt load? what would your solution be for the financing? mmusi: we have are the engaged international markets. we need international markets to purchase the debt. but you can't do that unless you are willing to split the entity into two. it will allow for other users to come on board and in a distributive market, you can ensure -- because of the debt is stimulated by municipalities not capable to pay. if you allow consumers the ability to purchase from a diversity of ranges, you can do that. the south african banking sector

already agrees we can purchase the debt and it we can have a payback mechanism over a long time. but it requires. the reform of the entity itself. stimulated the economy requires the introduction of independent power producers to come on board. nejra: can i also ask about some theents from moodys, saying country that ratio is worse than budgeted. what would you do to address this problem? mmusi: south africa's that is stimulated really by the danger that state owned enterprises face. secondly, in its own fiscal framework, we have three outstanding items -- welfare, to do with the debt service and cost, and our bloated service. south africa has to stabilize the sectors. i would reduce the size of the state. we have to bite the bullet by making sure we have less people in the administration.

to ensure that that the gdp ratio -- the best to gdp ratio will decrease. secondly, more than anything, we need to ensure that our welfare costs, if south africa is not creating a different model of decentralization around state owned enterprises so that some privatized,ces are that when we are not having to put out major bailouts the state enterprises, we can ensure that south africa is not just focused on debt servicing, but rather focused on the growth dynamic of south africa can we .ursue that. thought, manus: somebody questions or need to hold onto state assets. are you saying that you would support a review of state assets and perhaps a divestiture program, if you have that optionality in a coalition? mmusi: i would certainly do that

without a shadow of a doubt. south africa, if you look at the state-owned airline, we are already investing over 5 billion rands in state guarantees going into it is the next fiscal year. this could have been used for other purposes. i don't think we should -- we can keep the name of the airline, but certainly private equity partners need to come on board. we are investing 23 billion into allowingty, and private equity partners means that south africa can have areas.ent going to other i would force a program of the investment from the state in major state-owned enterprises. at think it is an archaic model ownership. i think the states are capable of managing some of these assets and we can allow international partners to invest in a much more aggressive manner. of it,iven the openness

in south africa the confusion is would prefer competition in the private sector but not in the sector. a stimulus would require better competition in the public sector and public on enterprises to growth. to focus on so i am inviting international investors and saying, if we diversify so that the state does not monopolize key sectors, you can come in and compete in those sectors. this will allow not only are growth but also our stability going forward. nejra: how comfortable are you with the inflation at the moment, right at the midpoint target range? mmusi: i think the mandate of the reserve bank is correct, to target inflation between 3% and 6%. but there are certain administered costs that some african is to be putting on board. one of the key drivers of inflation is increasing fuel costs, driven inherently by new taxes the state has introduced because the state is bloated. they are also driven by the fact that we have the road accident fund, which is also introducing

a further tax on the consumer. my argument is simply that if we decrease the size of the state and not tax consumers at the level we are taxing them at, we can reduce the cost of fuel and other administered costs, so that consumers can fill relief. the cost of living in south africa is increasing to the point where money flow is not efficient, therefore, consumers are not able to purchase other items. south africa's state is bigger on average than many oecd countries, the future of south africa does not require a bigger state, it requires a much smaller one.. and i have a plan to make sure that we make certain aspects of the state much smaller and much more effective so we don't have to keep introducing further taxes to the consumer to add to the burden of inflation. best: inherent is inherent in that statement is that it will be of what to conquer some of the challenges -- inherent in that assessment

is that it will be able to conquer some of the challenges with the unions. would you prepare to go to a coalition with the anc if that delivers this results to the country? mmusi: what is crucial is that the anc needs reform. we cannot go in its current state with the number of people in the party themselves who are facing serious criminal charges. it would be disingenuous of me as a south african who stands against corruption, who has not been found to be corrupt to coalesce with people in corruption. what we need to do is argue the case, what is the plan, the agenda? , athe agenda is for reform decentralization of the state and ensuring much more investment is given to the private sector, that part of the anc, living that there is a plan that would work and would ensure in nonracial south africa. but it would have to be a negotiated settlement over a long time frame, and with a plan to make sure that south africa

grows beyond 0.8%, which is currently projected that. nejra: i just want to get your thoughts on the policy of redistribution. are you concerned it could lead to a land grab? land restitution and land reform is a crucial aspect of justice. history requires that. i think amending the constitution to allow for expropriation without compensation will lead to land grabs. because ultimately, the great hunger for many south africans cities.in urban there is vast amount of land in south africa, urban land is what is in desperate need. what we already starting to see is more more people moving toward city centers and occupying land, land grabbing in that sense, which is creating a lawlessness. furthermore, i think if you remove the context of expropriation without section 25 of our constitution which gives private property rights and amend that, you will end up with a similar situation in other countries

where there is land grabs as you have seen in a venezuela and zimbabwe. i would urge the south african government, we have already need ton section 25, we create the political will and financial resources to address the historical injustice, but we can do so under the current framework and empower our judicial system to ensure that the dispute around compensation can be settled by the court rather than the politicians who are seeking a popular mandate to allow more people to take land in land grabs. ultimately, this needs to be managed responsibly by a government that is capable to execute on the policy. nejra: mmusi maimane, leader of the democratic alliance, opposition party in south africa. thank you so much for joining us for the exclusive interview. joining us from our bloomberg quint partner in mumbai is niraj shah and in london is annmarie hordern. let us start with you, niraj.

equities are down today, pretty much across the board. are they just following with the rest of asia, or other losses airways, which suspended its lights causing the index to go lower? niraj: good morning. the sentimental impact doesn't really cultivate on the index per se, jet started off lower while the markets started in the green. so one part is that jet airways by itself is big news, but it is not driving the index lower, to my mind. but there was the forward and mahindra joint venture -- the ford and mahindra joint venture as well. i think the potential news of , and aramco buying a stake all these other newsmakers, they have released it out. there is a growing pile of debt

which it needs to reduce to fund is telecom operations in india, and if that deal happens for reliance industries, it could be huge. you're right, the rest of the asian markets, almost everything else has come off. but it is a busy day today for india. manus: good to see you, niraj. thank you very much for the roundup. annmarie hordern is back to london and we are seeing some mild weakness across the markets. that is a question about the china story. is it just that investors are taking risk off the table as you go into the weekend, or is it something to do with a bit of a whiff from alcoa cutting demand? annmarie: that is a good question. we are seeing letter volume ahead of easter weekend. you can see across the board, equity industries in asia are lower with the kospi and the

nikkei during the brunt of those losses. the hang seng and cmi are also touch lower. we are seeing a bit of a haven play with the japanese yen higher. there is still a dispute as a result of the local election and that is lingering in indonesia. looking at alcoa and commodities, steel, zinc, nickel , platinum, they are down. lower.f metals aluminum is higher, the second worst-performing base metal of the year. alcoa cut their demand on aluminum after the reported earnings last night. i am looking at the chart because the ceo had mentioned the automobile sector. you can see chinese automobile passenger sales are edging lower at the same time aluminum prices are lower. they are dimming the price outlook for this metal from everything from cars to computers. the ceo of alcoa said, we're just not in the greatest of

markets. the reason why everyone looks at alcoa is because people consider it a bellwether for the economy. nejra: thank you both so much. coming up, and unofficial winner in india. stocks and the rupee a jump after the incumbent secures a second term. we have the latest live from jakarta. this is bloomberg. ♪

♪ nejra: this is bloomberg daybreak: europe, i am nejra .ehic in london manus: and i am manus cranny in our dubai studio. the world's largest single day democratic election. the rupiah jumped after unofficial results showed joko jokowi, known as winning the election. avril agencies have him ahead of

seven percentage rents, adding him on course for a second term as president of the world's third-largest democracy. joining us is professor of global islamic politics at deakin university, greg barton. good to see you. tois now or never for jokowi fix the indonesia economic challenge. what does he have to do first when he gets back into power, as we as you he will, what is top of the inbox? greg: he just has a tremendous vote of confidence, it was he has to do is keep up the good .ork and move it ahead it is to make it easier for foreign investment, and increasing their labor laws so that the indonesian labor force can get the levels are for -- levels of productivity up. -- goodre you expecting morning, -- are you expecting

any significant changes to his that theassuming unofficial results are confirmed later on? fiscal much of the policy will depend on whether he chooses to retain his finance minister. think everyone hopes he will retain her and that the cabinet will remain substantially as it is, but you have to expect some changes after five years. it is now very clear that we have a constellation of two course,alitions and of it was two horserace of a presidency. a lot of people gave jokowi financial backing and they will expect something from the covenant. the hope is that we will have continuity and a move towards opening up the labor market. that will be consistent with what we've had so far, but it needs to accelerate. manus: he started five years with gusto and paste in terms of

-- and paste in terms of reversing some of the subsidies. but he rested assets away from chevron, ttotae, what does he need to do to undo some of the angst that those corporates after having their assets rested away from them? greg: indonesia tends to be mostly nationalistic that goes against its own best interests, so it is to recognize that it is in indonesia's best interest to attract foreign investment and build confidence if it is to match the likes of vietnam, malaysia and thailand in terms of manufacturing an investment that. in a way that doesn't risk indonesia's independent. so i a lot will depend upon cabinet choices. but he has a two-term limit, nothing to lose but everything to gain. the hope is that he will accelerate reform. nejra: in terms of what some of

main policy pledges were, he wanted to speed up infrastructure spending, promising to reduce poverty, keep prices low, improved tax revenue, quite a list, also expected to spend more on education and training. how optimistic are you that any of these or most of these will be achieved? greg: i think all of those will be achieved to a varying degree. if it is a question of to what extent, infrastructure investment is very clear, just going around jakarta and the country, that indonesia has been transformed in the last five years. but it does require more foreign investment and growth above 4.2% that has been achieved the last decade. there is now a tax base to fund more spending and education -- spending in education and health , and other needful improvement

in the workforce, but it is a question of to what degree. everyone is hoping it can go to 6% growth, but that is much easier said than done, and a lot would depend on the confidence in terms of international investment, and that is the biggest challenge for jokowi in an environment where his political backers and the nation as a whole tends to be excessively nationalistic. nejra: indeed. one of our commentators on the bloomberg saying that for indonesia's leader, reelection is the easy part. thank you very much, greg barton, professor at deakin university. here is what we should be watching today. lots of data -- effectively services and composite pmi from france. 15 minutes later, we get the numbers for germany and at 8:30, eurozone.s for the at 9:30 a.m., we have the u.k. high street numbers and at 1:30 p.m., we have the numbers from u.s..

janet, briefly, people say that they expect euro zone data to pick up for the second half of the year. do you agree? >> yes, i think we'll start to see a bottoming out of the numbers. i think today we will get impressive numbers, they will give us some indication. where there is still a risk that things will slow from here because if you look at for example the german factory orders, some of the lead indicators still point to near-term slow in the industrial side, but if you look at the recent releases from the iso business survey, the expectation index is usually a good indicator of what happens. that has started to pick up. recently, we had the ew expectation index also picked up. of course, china data always lacks behind european -- always lags behind european data by at least tex-mex.

manus: -- by at least six months. manus: we will continue the conversation on bloomberg radio and will talk to this man. ♪ xfinity watchathon week has sadly come to an end.

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manus: good morning, from dubai, imf manus cranny from dubai, with nejra cehic from london. today's top stories. positive momentum, guggenheim says the central banks rain squalls pushes recession risk back -- the central banks raise cause pushes recession risk back to 2021. as theinted numbers earnings season gets into full swing. and, as shakeup at jp morgan a shuffle of the top of america's biggest banks charts a discussion about succession

plans after the jamie dimon in era. ♪ nejra: good morning, everyone. numbers, we have first-quarter revenue coming in euros, thelion estimate was 12.54, so a bit light in terms of the first-quarter revenue. but unilever is on track for its for your view and it is still sees the 19 usg in the lower usg, the best sees the 2019 in the lower half of its range. pricingarter underline comes in at 1.9%, letter than the estimate of 2.1%. which is interesting, going into

these numbers, activists were expecting unilever's performance to grow at the same rate as last year it was bigger contribution from price increases rather than volume. first quarter underline sales red headline coming through, up 3.1%. the estimate was up 2.8%. so we are better than expected on first quarter underlying sales. unilever is still on track for its 2020 target. the first quarter dividend per 41.04 cents.in at manus: a little bit of german data to add to our information from yesterday, the big downgrade, let us look at bond markets. on comes in at 2.4% year contracts. equity markets are pausing and reflecting in terms of the china data. suggested growth rate of about 6% if you believe the data.

and markets, we are seeing pitch around in terms of today's sentiment. bullard says he sees the yield curve steepening and the inflation is indicative of a curve. inactive phillips the question to ask is this, if guggenheim are right and there is no recession risk until 2021, you want to sell bonds in that context and take yields back up to the 3% level? there is no doubt about it, we will get that emi, the euro area survey today, that will help us decide, are we almost out of the woods? is mario draghi and the rest of his cohorts right? have we seen the bottom of the pressure? that is a question. nejra: we have seen six days of gains for european equities, but it looks like we could snap that today judging by the futures. ftse, dax and tax 40 all in the

features all in at the negative territory following the decline in the s&p 500 yesterday, that having to do with health care stocks. bloomberg released a survey for the directionality for the rest of the year, and germany's dax is seen ending the year at 11,600 38 points, 4.2% below yesterday's close. the ftse is seen that ending 6997 points, 6.4% below and a stoxxclose; 600 seen ending 2019 at 355 points, almost 9% below close.ay's so we had six days of gains, but the survey shows we could end of the year lower for european indices. let's check on the markets in asia. david inglis in hong kong, good to see you again. european market

seems to be transiting to asia as well. >> absolutely, the benchmark is down, and this big blob of china, flat for a second straight day in china. is good data, but we are also moving into a long weekend, and next week in the asia-pacific, about a third of the index will report earnings. what we have seen in the rally is it has been more about price then the need to get your estimates up as well. we started the year at 11 and 5x forward earnings. people are waiting for the earnings next week as a catalyst. that is where we are seeing volume also on the lighter side. here are some movers. you guys were mentioning psmc out with earnings, the stock traded is closed now.

indonesia is a good story because of elections, post-election surge especially across the financials and infrastructure stocks. jet airways on 27%, operating temporarily stopped because there seems to be no money. and, samsung electronics down the most in seven weeks, due to problems with the foldable screens. they are still looking to launch next week. as you can see, there is a drag. and the kospi is down 3%. airways is jet simply quite shocking. david, thanks for the roundup in hong kong with your markets. a little more information, the fed survey shows u.s. economy grew at a slight moderate pace in march, and that was versus earlier in the month. that is similar to the previous report. most districts saw

stronger home sales and manufacturing conditions were also seen as favorable despite the trade uncertainty. u.s. stocks fell to a one-week low. the latest batch of corporate earnings did little to boost confidence in the economy. speaking of stocks, from guggenheim, maynard says there are better alternatives to the u.s.. >> one of the places i think is very under owned is the emerging markets. if you are going to have equity exposure i think emerging markets is an interesting place to have some of your exposure rather than in the large-cap u.s. markets. manus: there you go. a little bit more em versus u.s.. kevin daly is u.s. director of emerging-market debt at aberdeen . great to have you here on the back of this particular comment. minard was -- talking about the equity side, but would you prefer em debt

relative to u.s. investment high-yield? in em investor, so of course i would say emerging-market debt, but the backdrop for em remains constructive. we are still seeing good growth in em. obviously, the fed being on hold , you have the u.s. china trade talks which seem to be reaching conclusion, and on top of that, we have attractive, still attractive valuations in em. the story for em is a change from last year. we had very strong headwinds weighing on em and now those headwinds have fitted at this point. nejra: what does that mean for e.m. corporate debt? where would you prefer to be taking risk in that space? kevin: historically, e.m. corporate debt has been much lower volatility than e.m. sovereign debt. if you are an investor still

looking for attractive yield but a little more concern about minimizing the downside risk, em corporates is certainly a more attractive place to be than in sovereign. manus: you made some significant change, in the context, would -- you havere still added to the south african rand -- to your african position. we spent some time with the opposition politician in the past 40 minutes. tell me who you are thinking about, why you have added to your underweight position in south africa. kevin: our concern is that post-election, the challenges amaphosa will still remain elevated. if the results are stronger than expected, and they get more than 40% of the vote, it would give him more power to push on structural reform measures, but at the same time, this is a countries still with low growth

prospects. the situation is still very difficult. we are heading into the winter in south africa and will have to see how they handle that. then, we have the risk of the moody's downgraded still very high. is likely to happen this year perhaps maybe an outlook revision later in the year. look we got from moody's is that there will wait until the election to see how things play out with the government. again, the risk for south africa is still pretty high even post-election. nejra: sticking with political risk, i want to ask about the turkish lira, the worst-performing e.m. currency dollar.ainst the it seems to be declining a bit with the risk coming back over the dispute over the turkish vote. i want to know why you are remaining overweight the turkish lira with that backdrop.

kevin: the turkish lira is -- it offers very high yields, first of all, second to argentina in terms of the yield you can get on currency debt. again, valuations still remain cheap but we recognize the fact that there are still some risks from the top, from politics waiting on the lira -- weighing on the zero. we don't expect cbt to hike rates anytime soon. if things deteriorate, we believe there will be an appropriate holocene response, but at this rate -- an appropriate policy response. but clearly, the headline risk is pretty high on lira. but given that we are still in an environment where investors are looking to allocated to emerging-market debt, the turkish lira kerry is still very high. there is an attractive risk reward their.

. we still think the prospects of the lira are still reasonably attractive where it warrants an overweight position at this stage. manus: there seems to be consensusbuilding that within the emr market that we will see an additional rate cuts, transferring to -- the reserve bank of australia, new zealand, maybe even more leniency from some of the other central banks. what does that mean for em? does it open at the doorway to more aggressive cuts in e.m. and if so, where? kevin: not necessarily opening up -- it doesn't mean we will have central banks and em start to cut rates. there is hope that mexico will cut at some point. is highly unlikely unless you get some positive development on social security reform. there is indonesia, india, you could see some cuts there. possibly second half of the year, if inflation has to fall in south africa.

so there is still prospects out there for em easing. but i would say on the whole, the attractiveness for em is that if you get dm rates remaining relatively low for the foreseeable future, that would prompt more growth back into the em and that is where em looks more attractive versus dm, more attractive yields. certainly we think that will help attract flows back into em. nejra: kevin daly, investment director of emerging-market debt at aberdeen asset management stays with us. first let's get the news with debra mao in hong kong. debra: the u.s. and china are aiming to reach a trade deal by so that president trump and president xi jinping could sign it later that month. bloomberg has learned that the white house's trade team wants to travel to beijing in the week of april 29.

energy secretary rick perry is reportedly planning to leave the trump administration. bloomberg learned he is finalizing the terms and timing of his departure. one source says that the otherre is not imminent, say the former texas governor has been considering leaving for weeks. and experimental gene therapy has cured eight infants with the so-called bubble boy disease, and immune system deficiency so severe that children with it were kept in total isolation. but researchers have developed a treatment to correct the genetic defect. it has not been licensed to , a smallio pharmaceutical company which intends to file for regulatory approval. j.p. morgan is increasing responsibility for two top female executives. cfo marianne lake will become the head of consumer lending, well jennifer cap at will switch to be cfo. the changes take effect may one.

the shuffle is seen as a bit to the opportunity to bolster the skills they need to potentially lead the whole company. global news, 24 hours a day, on air and at tic-toc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. manus? manus: deborah, thank you very much. the question of the day on mliv is as follows, and you can take it in any direction you want. 2019, what could derail the rally? the mliv team are there, you can pop your questions on their. nejra. nejra: coming up, the south africa central bank wise economic growth could be zero this year. we will talk more emerging markets with kevin daly from aberdeen asset management. this is bloomberg. ♪

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manus: it is just 7:18 a.m. in london, we are 41 minutes and counting down to the start of your cash trading in european markets. this is bloomberg daybreak: europe. welcome to the show. i am manus cranny in dubai. nejra: and i am they are change in london. speaking of equity trading, let us look at the markets. on the downside after six days of gains for european equities. and there could be more downside. according to a bloomberg survey, the stoxx 600 equity benchmark falling 8.9% by the end of 2019 from yesterday's close. u.s. futures also on the back .2%. down we saw some weakness in the s&p 500 yesterday due to health care stocks. the yuan retreating from in july high a little bit. manus: money goes into the yen, slight haven-seeking, likewise of bond. copper london is also down, quite a bullish call on hopper

as we go through the rest of the year. we are a bit lighter. we made it to a nine-month high on futures yesterday. so the question is, for market, what do european equities -- where do they go in the second half of the year? go, dax is 4% below where we are, ftse, 6% where we were at close of business last night. and the s&p 500 9% below. there seems to be a lack of belief in those market calls. it could be down to the earnings. let's get to debra mao with the latest number business flash in hong kong. manus, canopy growth is trying to be the first major cross-border cannabis deal. the deal could be announced as soon as this week. encourage soared 15% in toronto before the market closed.

canopy is the world largest -- company. pinterest has raised $1.4 billion in its ipo. the picture sharing platforms message was not to compare it to social media or its search engine. , above shares for $19 h the $15-$17 range. struggling with its jet airways, after failing to secure a bailout and suspending all flight. the carrier says the ground and is only temporary but admits it cannot pay fees or fuel bills. it was once india's number two airline having broken india's monopoly when it launched in the early 1990's. the stock has collapsed over 70% in the last 12 months. that is your bloomberg business flash. nejra: thank you. let's carry on the emerging-market conversation, kevin daly, director of

emerging-market debt at evidence tendered is here. -- at aberdeen standard is here. what would be your key takeaway from the conversations you had without lumping the yen into one homogenous mass? kevin: investors were generally fairly relaxed going into the meetings. i think the backed up for em as we were discussing earlier remains pretty attractive. you have the fed remaining on hold the u.s.-china trade talks, heading to a conclusion, china's growth stabilizing, the dollar starting to -- just sideways. so the backdrop for em remains attractive. with policymakers, it depends on the country. there were discussions with turkish officials that didn't go well, discussions with brazil which were very encouraging, and then, argentina is somewhere in

the middle given the challenges and struggles that countries facing right now. manus: they certainly do face a number of struggles. china, if we could just give it to that, that is the anchor that.of all i want to show you a board of monitors our bloomberg intelligence team look at, because of the have a certain tick analysis they do in terms of the aggregate financing ,earing away on the top right and the long-term corporate loans. are you a believer? what do you make of the recent flow? kevin: i think with chinese data you always have to treat some of it with a grain of salt, because as we know, it tends to show a lot more stability than what the private sector chinese activity indices show the weird for

example last year the chinese activity indices were showing growth slowing sharply, as low as 4% or 5%, well below the official growth data. so you have to treat that with a little bit of caution when you get the official numbers coming out. but i think this is also what spurred chinese officials to start realizing they needed to provide some stimulus for the country. you saw ajanuary strong credit impulse and cost-cutting measures. it is starting to not only show that data is stabilizing or q4, but morem importantly, given the market confidence -- giving the market confidence that chinese officials understand they have to do something. now the consensus is that we are seeing growth stabilizing in china. so i think it is certainly a markete from the

standpoint that officials in china recognize they have to do something about it. nejra: jumping off the china discussion, what would be your preferred region in emerging asia in terms of debt? kevin: preferred region, country, for us, it would be the two i's. and indonesia, they are the high-yield markets in asia. we see those as attractive. and the election is really not having a factor, we saw the jokots as expected, winning yesterday would provide a catalyst for back of indonesia cutting for next year. in india, we have elections coming up in may. , the, we think that modi coalition will get a majority and that should keep the markets

still onside in terms of the carry trade in india. manus: if you take on those indian and indonesian bonds or scale up and scale in, do you hedge the currency exposure, because perhaps that is relatively could come if we get another pop on e.m. markets this year? kevin: we have from time to time hedged some of our exposure. for example, we might at this point have a larger position in indonesian rates. we have had a little bit of the fx. the discussion now could be that we might look to unhedge stage. rdr risk at this and in india, we have had some repositions in the past, larger positions on rate than we have in the currency, but we are overweight with of those countries at this stage. manus: ok. kevin, thank you so much for

being our guest host this morning. kevin daly, investment director for emerging market debt for aberdeen standard. that is it for daybreak europe. european market open is up next. this is bloomberg. ♪

♪ >> good morning and welcome to bloomberg markets. this is the european open, i am matt miller here in berlin. stocks in asia dip as corporate earnings doolittle to boost u.s. counterparts. europe points lower as well. the cash trade is less than 30 minutes away. ♪ an end in sight. the u.s. and china