>> good morning from bloomberg's european headquarters in london. this is "bloomberg daybreak: europe," and these are today's top stories. amazon profits surge as focus on the cloud pays off, but shareholders are unmoved. the uber ipo could see the $90 billion valuation. measured tone. xi jinping said there will not be harmful depreciation of the yuan as the u.s. will consider pharma concessions. anders from rbs, totale, after zeneca hit -- astrazeneca hit this morning.

good morning, everyone. elcome to "daybreak europe." we have breaking news coming through on deutsche bank. we heard yesterday that the merger is off with commerzbank. what we have coming through hitting the tape is first quarter sales and trading revenue coming in at 1.5 2 billion euros for deutsche bank, beating the estimates. it is a beat on first quarter fic sales and trading for deutsche bank. and then it is also saying it is on track to meet the 2019 adjusted cost target.

the return on equity depends on external factors. trading revenue coming in at a fairly reasonable beat? 525 million euros, the estimate. the big question, can deutsche bank turn itself around on its own? the big question we are going to explore in this hour. let's turn to dws. what we are seeing is first quarter net income coming in at 102 million euros. the first quarter adjusted pretax comes in at 153 million euros, beating the estimate of 146.8 million. inflows, 2.5 net

billion euros. the company compiled estimate was 200 million euros. that is coming in better than expected. of course, questions with dws talking about potential combinations, questions over whether that will merge with the ubs asset management. let's get to the broader markets. tech was the big story in the u.s. markets yesterday. we saw the nasdaq hit a record. facebook shares doing well as well. the s&p 500 closed pretty much flat because we had tech doing well, but some industrials not doing well. overall, it was nothing to see on the s&p 500. futures struggling for direction a bit today as we look ahead to the gdp data. ahead of that, the 10-year yield. the bloomberg dollar index not doing a lot, but it is heading for a second week of gains. we have seen it hit a four-month high. euro weakness has been a bit of a story. we stay at the 1.10 spot.

msci emerging market currency market -- index. the weekly loss could be to do with dollar strength. you also have the argentinian markets roiled yesterday. as thea also weakening, central bank took away the hawkish tilt. weaknesses of the come through this week after the surprising increase in stockpiles data. overall, we are heading for an eighth week of gains in crude. let's check in on the markets in asia now. our correspondent in singapore has more now. you have trade headlines coming through as well and the yuan in focus in asia. good to see you. juliette: yes, we heard from xi jinping today saying they are not trying to depreciate the

stocks -- you want. -- yuan. on track for the worst weekly loss since october, the stocks. we are awaiting a slew of earnings from chinese companies today and next week. perhaps that could turn fortunes around, but it has not been a great week for chinese equities. -- the longest time we will have seen japanese markets close since the end of world war ii. the asx 200, pretty flat after resuming trade. indian stocks looking ok. let's have a look at some of the stocks in detail. we have seen chipmakers in asia coming under pressure after we saw intel cut its revenue forecast, led by tsmc, having its biggest fall since january. it has fallen quite substantially today. steel also in focus. i would say the top gainer on fell asindex is profit

weak prices offset volume gains. there was also a fire at a welsh client. says the fire is under control. comedycentre is tumbling worst performer on the -- tumbling today, the worst performer on the mrr. --cut its rock asked forecast profits due to subdue trading conditions. we are awaiting a number of companies to report from china this afternoon. nejra: juliette, thank you so much. i broke the deutsche bank headlines at the top of the hour. one of the main headlines i was looking at was the first quarter fic sales. deutsche bank is cutting its

sales outlook and it says revenue to be flat. a lot of questions after the proposed merger with commerzbank is not going to happen. does it mean deutsche bank has to make more cuts to its investment banking unit? first, let's turn back to the trade story. saying thei jinping belt and road initiative has created new opportunities and will a global growth. he also pledged to clean up the initiative. it faced criticism of her lack of transparency and claims that it is indenting -- endebting foreign nations. >> china will not resort to the practice of renminbi devaluation. we will continue to improve the exchange rate regime. the market plays a decisive role in resource allocation and we will keep the exchange rate basically stable at an adaptive and equilibrium level. these steps will ensure the steady growth of the global economy. jinpinghat was xi

speaking in beijing earlier today. the comments set the yuan rallying, before paring its gains somewhat. joining us now is the chief investment strategist for northern trust asset management. great you have you with us this morning. i have discussions on most on a daily basis about the outlook for china. you are not so convinced at the moment that the outlook is enough to lift other emerging markets. >> we are on the cusp of it. we are trying to look at it from a positive angle. we also want to see more paula through on the data -- followthrough on the data to take the next step. we have seen that em has been under a little bit of pressure, especially on the currency front. we have seen the pressures build up. we see that the global trade angle is still somewhat in doubt. we want to see more coming from china, more from trading general, before we take the next that. >> the chinese stock market has been coming under pressure.

you alluded to it on speculation that the government might scale back on stimulus, now that the economy is showing some signs of studying. do you think we are going to see a little bit of a scale back on stimulus and is that going to pressure markets? >> i think the targeted part of the stimulus is what we should be focusing on. where are they going to put the pressure on the stimulus? are they going to look for the same soe's to bring the stimulus to the economy or are they going to broaden it out? that is the part that has been lagging. if you look at the direct investment side in the chinese economy, it is the public part that has been accelerating, while the private part has been lagging. that is what the market is looking for. they want to see the switch from public to private, to get more confidence that it is more durable and sustainable in terms of stimulus measures. nejra: bloomberg economics has been making the same point about the private sector. question,to the mliv

asking whether chinese stocks have peaked for this quarter. i think you are underweight emerging-market stocks in general. do you think chinese stocks have peaked? >> that is a hard question. [laughter] i do think that there are pressures there. i think it is the trade angle that is going to make of a difference. we do think the trade angle should improve from here and that the dollar angle should the dollarak and strength should roll over a little bit, but until we see that, the question would be, more likely than not, chinese stocks have peaked. if we do see improvement on the global trading of, we think they should be able to do better in the future. nejra: interesting that you think dollar strength might roll over a little bit. just a little bit more on your underweight on emerging-market equities, i mentioned at the top the idiosyncratic news out of argentina and turkey, which said the currencies tumbling, also reaction in the argentine bond market.

generally, you are quite pro-risk in your portfolio. what is the risk not translate to emerging markets? i understand the link with china. if you see the dollar rolling over, surely you would want to think of it. >> the dollar should be starting to roll over from here and that has been the angle for us. we did not see it roll over before. it has not been rallying hard and we think that there is potential for that to change, because global trade should improve and the dollar should follow suit. think the dollar has been profiting from the least ugly outlook. global growth has been slowing year to date. the u.s. looks to be the least effected so far. we think that perception is going to change from here. it has not yet so far. strength is dollar a reflection of the previous growth trend. do ae should be able to

little bit better. that trend needs to switch. what: if it does switch, will it mean for the rest of the portfolio. part of it is in u.s. assets. >> we think u.s. equities are still the slightly more attractive way to have. we have also taken a lot of risk in u.s. high-yield. here, that is slightly going to change a little bit. , if we donds continue see continued improvement from china, from europe, we will likely switch some of those assets out of the u.s. and international assets. em. secondly into nejra: interesting. i've guest stays with us for the

hour. let's get the bloomberg first word news. to keepsa may's plan britain out of the european elections next month is all but dead every bloomberg has learned the prime minister is unlikely to put her brexit bill to parliament next week, meaning she could run out of time to get it ratified before the boat kicks off on may 23. she was desperate to keep the u.k. out of the elections, they threatened to be particularly damaging to her conservative party. a valuationng for of about $80 billion-$90 billion in its ipo. bloomberg has learned they are looking for $44-$50 per share. shame -- we need more time to resolve our differences, that is what elon musk has told a judge over the tweeting habits

of the chief executive. the regulator asked him to be held in contempt of court. both sides say they failed to come to a resolution. amazon is spending $800 million in the current quarter to reduce delivery times. this as the e-commerce giant is trying to ward off increased competition. denouncement came after they posted first-quarter profits that beat expectations. it demonstrates amazon's focus on cloud computing and emma that rising -- advertising and other businesses. global news powered by more than 2700 journalists\ and analysts in more than 120 countries. this is bloomberg. nejra: thank you so much. coming up, the two biggest listed german banks pull the plug on merger talks. we will discuss what is next for deutsche bank and commerzbank. this is bloomberg. ♪

north korean leader kim ng-un isand -- jo departing russia by train -- departing by train after he used talks with putin to accuse the u.s. of bad faith in talks. right now, we are looking at pictures of him about to depart by train. i'm a big fan, had a lovely trip there. this is "bloomberg daybreak: cheic in i'm nejra london. germany's biggest lender has cut its 2019 sales outlook, sing revenue will be flat. it sees first-quarter revenue at 6.4 billion euros and says credit loss provisions will remain in the mid-teens, a day

after it pulled the plug with -- of the merger with potential rival commerzbank. the deutsche bank cfo says the german lender is still prepared to look at future deals. we spoke to matt miller following the announcement. envisage over time that industry consolidation will take place in europe and that deutsche bank wants to be part of that. the timing and the specific form of that remains to be seen. we talked a lot about doing our homework to continue executing on our plans, executing on the restructuring of the company, and improving our shareholder returns. we are continuing that work. we will remain focused on that. see eventsyou will in terms of consolidation in europe. it is a natural part of the strategic environment within which we live. feel like there is pressure to do a cross-border merger? that was obviously a huge part of the discussion over the last

few weeks. would deutsche bank be open to that? it was one of the reasons we felt we had to look at the merger as it became an opportunity for us earlier this year. in market consolidation is a strategic opportunity one has to look at when that opportunity arises. commerzbank is the last remaining significantly publicly listed german bank, it was a national partner to continue. having decided to go our separate ways, it opens the door to potential cross-border .onsolidation i would not speculate on the nature or the timing of that type of event. matt: what would your reaction now doing azbank bigger kind of deal with a

cross-border peer? would that be a problem for you competitively? , it was one consideration that my management board colleagues and i needed to take into account as we thought about the decision we announced today and our future path. we feel we compete successfully in the german market today. it is a very competitive market. we are obviously aware that we may face changes in that competitive environment in the future. we think we are well prepared for that. nejra: for more on which potential suitors may arise is dani berger. they did expressed interest in consolidation, it might be commerzbank the first forges a deal because it is the smaller of the two. that might be because it would be easier to digest for european lenders. we heard a lot of noise from a dutch lender that reached out to

commerzbank and the german government to seek talks. with the commerzbank ceo reportedly rejecting discussions, but has not broken of contact completely. unicredit, we have heard that more recently considering a bid, according to people familiar. in 2017, they held talks with the german government, as did bnp. they spoke to officials around the same time. that helps fuel speculation that bnp may arise as a suitor yet again. both socgen and santander executives have expressed interest. they say the price needs to be right. collapse of the deutsche bank talks have occurred, they may step up their efforts.

also joining us is keith campbell, the london finance editor. for joining us early. we put a rundown of some of the options in terms of cross-border european mergers, but we also have the deutsche bank numbers out this morning and it said it expects revenue to be flat this year, but also income from buying and selling securities falling 19% in the first quarter . the question becomes, if deutsche bank does not embark on another merger, could we see a new strategy? keith: that is widely speculated. i think they have had five turnaround plans. you need to get back to the hard work of trying a new strategy here.

it reminds me yesterday a barclays, which has been another turnaround story from an investment bank. there are only so many costs you can cut. asra: with deutsche bank well, some of the other , we did notat come seem to get any sign yesterday when they spoke. options is how it is described for deutsche bank and commerzbank, by bloomberg. his consolidation the only way forward? keith: the appetite is out there for commerzbank. we have a little joke that we have been writing this story for a couple years. here you have a situation with german policymakers, the german government has gone fairly far down the road of being open to

some kind of deal involving these companies. commerzbank is the easier one to digest. ceo's elsewhere in europe that are keen to make a deal. for deutsche bank wanting to be part of consolidation, that is all very well, but it is not clear who his dance partner might be. nejra: i know you don't hold banks in your portfolio, but what is your take? >> it is a european overbank situation. consolidate the sector to actually have some profitability. holdingthe ecb is still the european banking sector back with its negative rates, which has been a drag on profitability. is that changes, that would be helpful for the sector as a whole. still, we need to consolidate

and bring things back to a reasonable scale some profitability can improve. that is the real problem. ofra: we have had a lot earnings this week. what are you going to be looking ahead to for the rest of the banking earnings season? signs of will be again if anyone can make any more money in a shrinking revenue environment. it will be about the wealth management arm of various banks. suisse had some better quarters than their pile ofjust on that wealth management money in asia coming in. i looked at the stocks of these two and these are two of the good news stories in europe. kind of a defensive scenario for all these banks. nejra: great to have you with us. bloomberg's london finance editor. and the chief investment strategist at northern trust asset management. they stay with us. from banking to tech, amazon

delivers a thumbs-up for facebook and microsoft joins the $1 trillion club. that is next. this is bloomberg. ♪ mberg. ♪

nejra: let's get a look at asian markets. on the world map, you are seeing a little bit of a mixed picture, but we have generally seen a little bit of a retreat on the msci asian index. we are deep into earnings season. texted well, but some industrials did not. let's get to earnings in europe. eps comester business in at 1.42 euros. estimate was 1.32. it is a very clear beat on 's first quarter business.

it is confirming the eps guidance. what else am i looking at? first quarter sales rising at constant fx. it is a beat on the first quarter sales and a beat on the first quarter business eps for sanity -- sanofi. that is something to look for in the numbers, the drug pricing. let's see what else is coming through. .lso looking out for renault we have some carmaker numbers coming through. looking out for daimler. renault coming out first, confirming its full-year guidance. 12.5 billion euros, that is in line with the estimate. note and prizes. the first quarter revenue is falling. still looking out for daimler.

we will get back to you as we come through. mumbai is our correspondent. dani burger is here in london. let's kick it off in mumbai. india's benchmark sent to parents decline this week -- pare its decline this week. >> good morning to you. happy friday. you have a long weekend because monday is off for our markets, so it is a happier friday for me. the numbers have been a bit better. some of the others have not been as well. almost everything else has come in line or slightly better than estimated. a bit on the green side for our markets. still in the green. the banks were up 1%. it is now barely up in the green. having said that, the commentary

from management turned out to be positive, so maybe this is just traders not wanting to take some aggressive stance before the long holiday week. otherwise, earnings have been ok in the market on those stocks, there is a bit of a positive outlook. back to you. nejra: we are always waiting and watching. you are looking at chinese equities on track to post their worst weekly loss. dani: not so much of a happy friday here. about a 5% decline, that will be index sincer the october. that could get a lot worse heading into next week. it is a big week for earnings. the setup, you can see margin trading in the white near a peek. this is traders buying on debt. onto theireld

positions even though the rest of the market has declined, so should they get spooked, they could selloff. because this is a leverage position, it could worsen itself. another headwinds that you have been talking about all they, the stronger dollar. these usually move in opposite to each other. as the dollar strengthens, as , traderstocks sell move assets into u.s. assets away from emerging markets like china. ,ears of the chinese stimulus the pullback also in some of these losses we are seeing. next week could be just as tumultuous. nejra: we never tire of talking about king dollar. great work. thank you both. let me get back to more breaking news. we are deep into earnings season. i'm getting numbers through from daimler. first quarter, $2.8 billion. the estimate, $2.78 billion.

it is a slight beat. first quarter sales. the estimate, 39.28. that is a beat. still sees slight growth in unit sales, revenue, and earnings for 2019. that is commentary coming through here. cannot says that daimler and will not be satisfied with this moderate start. that is commentary coming through as well. first quarter, mercedes-benz cars return on sales is up 6.1%. let's get the bloomberg first word news. debra: deutsche bank has cut its 2019 sales outlook, saying

revenue for the year will be flat. the lender suffered its ninth straight quarter of revenue contraption a day after the bank pull the plug on merger talks with commerzbank. it fell apart over opposition from labor unions and shareholders. a new wave of tax cuts, that is what resident emmanuel macron has promised the french middle-class, his newest gambit to assuage the yellow vests protesters. he unveiled the plans in a news conference that stretched over two hours. he says his reform agenda must continue, even though it has faced backlash. think the ongoing necessary transformations we have to do in our country must be stopped. they have not been quick enough, not radical enough for some, not human enough, but i think the decisions taken during these first three years were fair. argentine bonds have

fallen into distress territory as a chance of a potential default arises on concerns that the president won't be able to fend off populist foes in an election this year. this is another setback for the south american nation. the country's back in recession and inflation is above 50%. global news on air and on twitter powered by more than 2700 journalists in more than 120 countries. this is bloomberg. nejra: thank you so much. weeks been another busy for corporate results. in europe, the banks took center stage. credit suisse's troubled trading business brought relief to the ceo. barclays revenue rose. the big story at deutsche bank was a collapse of a proposed merger with commerzbank. across the pond, the focus was on tech. it was a thumbs up for facebook as they posted robust orderly

sales growth. it is $1 trillion and counting for microsoft, a stronger than expected march quarter results meeting adjoins an exclusive market cap club. delivering the goods, amazon posts a strong beat on earnings, but it plans to spend it hundred million dollars in the current quarter to reduce delivery -- $800 million in the current quarter to reduce delivery signs. thank you for sticking around. matt, thanks for joining us early in the morning again. let's kick off with amazon. shares closing flat. does that suggest investors don't quite know where it -- what to make of where to go from here? on the one hand, you get the first quarter profit, but then you get the spending number. matt: there was a huge beat on earnings, almost doubling expectations. here is thatssue numbers were a little bit flat

close to expectations. the revenue range was pretty much in line for what expectations were, but the prophet number after that big beat was quite some way below. ofhink that is you kind alluded to, it is going to be a big year of investment for the company as they look to sustain the growth into the midterm and people have not been quite sure how much they will invest. shares that is why the did not really react quickly. nejra: give it to you this quarter, take it away next. the firstook at quarter, that was largely down to the focus on cloud computing, advertising, i suppose the question then becomes, can the makeup for business the delivery side of things? matthew: i think right now, most analysts would say they can.

it accounts for about half the prophet. it is a high-margin business and there is still great demand. i think just about they can kind of keep up the balance. it is an active program of investment. they are intentionally limiting near-term profit growth because they see opportunities. nejra: we are going to work our way through the pharma stocks. that hit a record in yesterday's session. the question becomes, it has done so well. does that continue? matthew: i think so. if you look across any industry sector, they are going through another process of transformation, which is completely i.t. driven. they are overhauling i.d. systems. are moving a lot of technology into the cloud.

microsoft is incredibly well positioned to deliver on both of those segments. i think there is still a huge runway. i want to bring you in, with tech, we could look at it from a top-down level in terms of the. if you look at the s&p 500 i.t. sector, it is well elevated above the valuation. this is the reason why you might not be positive on tech? >> yes, it is a mix for us. on the one hand, it does concern us. we think the valuation levels might be sustained for a while longer. it is an overall concern.

we think valuations might be stretched a little bit longer. on the short-term, these valuation levels are making it difficult. nejra: that brings us back to the pharma sector where we have largely seen these rallies. the nasdaq hitting a record yesterday, largely led by the pharma stocks. i know you have been keen to talk about facebook. talk us through the good news story we had their and whether there are risks to that outlook. i think a big question for people about facebook is whether they will pivot toward a more privacy center model and the acceptance of the regulation of the internet that could damage the profit growth outlook. they were quite clear that the business model impact, the opportunity to sell advertising revenue on the platform was not

going to be materially affected by these changes. in the long term, he's strengthening people's trust in the platform and potentially bringing more people onto the platform and using more. he does not really see much impact. , i think those words were reassuring. that is what you saw quite a positive reaction to the numbers. nejra: one of the things that has come up in our conversation with where we have been talking about, and we have intel numbers yesterday, it has been the biggest beneficiary of that years long, multibillion dollar spending spree by the cloud computing industry, but is signaling an end to an expansion that drove record revenue and profit. it is the world's second-biggest some i conductor. can i ask you about semi conductors also. one of the biggest questions is whether we will see a change in the cycle. muchthat tell you mode --

in your global portfolio construction? >> it is one of those risk areas. we saw it in the korean numbers last week on trade. they have been really disappointing. we need to see the turnaround. then semi conductors and industrials will come on the back of that and improve. right now, that improvement has not happened and it is in expectations game right now. china plays a big role in that and the trade talks between the u.s. and china clay a big role in that. if we see more of a resolution, we think that should improve. right now, it is still a hard one to call. keith: i think the issue -- matthew: i think the issue with intel is that a lot of the customers stockpile chips and now they are being used, so there is an excess of supply.

the market needs to work to this oversupply and i think intel should come back to growth in 2020. nejra: great to have you both with me. thanks so much. we will continue the conversation on bloomberg radio at 7:30 a.m. u.k. time. coming up, we speak to the chief -- catch that interview after 9:30 a.m. london time. this is bloomberg. ♪

market volatility. cash shortages. currency flash crashes. japan as among the most generous countries when it comes to national holidays, but golden week is extra long.

the greenery, children's day. a 10-day stretch wipes out six trading sessions, the longest market closer since 2002. majorsiness elsewhere has data on the agenda. nejra: that was some of the concerns of regulators as japan's market takes an extra long break. let's get the bloomberg business flash in hong kong. starbucks is still posting strong growth. that is coming from higher prices rather than an increase in traffic. the world's biggest coffee chain posted sales that beat estimates. it is betting it can increase estimates.

dovish -- it is also a to reducing new drinks to appeal to other customers. appeal torying to more investors. the strategy is focused on building up clusters. targeting more than 1000 companies. it is on a nationwide level. we are talking about biggest numbers. increase labor in the markets. the cloud computing expansion might be coming to an end, the message from intel.

the company forecast its data in 2019, the first drop in a decade. that is your bloomberg business flash. nejra: thank you. is it possible to construct and equity portfolio which seeks to a dress the world's most pressing environmental challenges? launched last year, it targets many of the u.n.'s sustainable goals, grouping them to guide the fund's investments. joining us is the head of impact investing and the comanager of the fund. welcome. thank you so much for joining us on the show. given that this is a fairly recent fund, talk to me a little bit about what the performance has been like and the focus of the past year? victoria: sure, the performance has been fantastic year to date. we launched toward the end of

last year. we know that q4 was strike a desk quite a tricky quarter. we have had a challenging start. it is quite nice to see the company doing well. nejra: the themes cover basic needs, health and well-being, healthy ecosystems, climates, there are a lot of different themes. talk to me about the role of impact investing before we get into the details. victoria: it is a really great question. , impact investing was brought out of more of the private debt space. it has moved a lot over the last few years. it has now begun a real presence in the equities.

these equities have such scale possible to engage that a really big and changing. they have a potential to change things on a huge scale. it is also the accessibility of impact equities. classver type of accept you pick, it is really brilliant to be able to match your financial and ethical goals. customers, it is now accessible. that is really interesting. for somebody sitting there a not quite understanding how you approach this, take us through a specific example. let's pick one of your themes. theme and take that

translated into picking specific stocks. victoria: there are lots of sub themes and the circular economy is one of those. when we find stocks to populate that theme, we are looking at the world from the perspective of what areas are blocking the u.n. sustainable development goals and what is blocking those and what are helping to fix those problems or solve those goals. we see them as blockers and fixers. it is this reliance we all have on single use plastic still. the fixers other companies with real innovation to shift us from this linear economy. we are still very much in we take set out of the ground and

we have to close that loop. the exciting thing about that is there is a lot to go for. nejra: growth potential. victoria: absolutely. these companies are growing through their potential. companies that provide innovative recycling solutions. companies that recycle toxic solutions. and also companies which use recycled packaging, we have lots of exciting platforms. there is an italian business that makes nylon fiber for clothes. it is not something you would associate with sustainability. they have a process which enables them to make this fiber from waste material.

we know it is a huge problem. it also recycles commercial carpet from commercial buildings. theyare taking waste and are making clothing fiber from it and this fiber can be recycled an infinite number of times. it is really fascinating to watch that business develop. nejra: it will be fascinating to watch how this fund develops. do come back and tell us more about it as the growth potential continues ahead. thank you so much, the comanager of the positive equity impact fund. i real pleasure to catch up with you this morning. coming up, from strength to strength, earnings season is in full swing. we will take a look at some of the companies flying high, including starbucks, which saw sales strongly beat estimates. later, we will be speaking to the starbucks ceo. don't miss that interview this afternoon on bloomberg tv. and remember, bloomberg users

can interact with the charts using tv , browse the recent charts to catch up on key analysis and save charts for future reference. this is bloomberg. ♪ bloomberg. ♪ moving is hard.

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nejra: good from bloomberg's european had orders -- headquarters. revenue target cut. numbers from rbs, told talc, and .strazeneca hit imminently a focus on the cloud pays off, but shareholders are moved. a $90's ipo could see billion valuation. chinese president xi jinping says there will not be a harmful depreciation of the one. the u.s. is said to consider concessions in trade talks.

good morning everyone and welcome to "daybreak europe." it is just on 7:00 a.m. in london. total get through to first. adjusted net income, 2.7 6 billion dollars. the median estimate was 2.78. a touch light for first quarter adjusted net income. total repeats it expects its 2019 production growth of more than 9%. that's what i'm looking at here. on theming through bloomberg japan interim dividend of 66 euros -- euro cents her share. per share. those are some of the numbers coming through from total.

the focus is on output growth and cash flow generation. that's what we will keep looking out for us these numbers keep coming through. let me get to sony. we are deep in earnings season. a lot of stuff coming through on the bloomberg. sony, net income at ¥500 billion. the estimate was ¥563.07 billion . softer on the full-year net income for sony. full-year operating income at ¥810 billion. estimate, ¥843 billion. that is a little bit worse than expected. ceo yesterday we heard the will be stepping down after his 12 month notice period. first quarter operating profit pretax comes in at 1.0 one billion pounds. the estimate, 900 million pounds. a beat on first quarter

operating profit pretax for rbs. let's look at some of the other numbers. net income comes in at 737 million pounds. a strong beat on the first quarter net income. the net interest margin, 1.89%. ct one ratio comes in at 16.2%. estimate, 16.3%. those are the numbers from rbs. to thethen take you pharma sector and look at astrazeneca. beat, reiterating its 2019 guidance. if i look at first quarter revenue, that comes in at $5.49 billion.

that is a beat. the main couple lines coming through from astrazeneca, cash in focus ahead of these numbers after the date she tie up. yesterday we saw the stoxx 600 close weaker down 0.2%. that is what the picture was for u.s. equities. the u.s. market close and flat, looking at the s&p 500, because tech stocks did really well. nasdaq hitting a record. industrial not doing so well. overall, a flat market for the u.s. in yesterday's session. taking a look at how futures are performing, the ftse 100 futures up 0.2% along with cac 40 futures. dax futures struggling for direction. 500's are flat, nasdaq futures pointing higher. amazon earnings as well for the market might react to that. a good news story, but

let's check on the markets in asia. juliette saly has more. we are seeing risk off coming through today. we certainly are. you can have a look at the csi 300. the chinese equity market , theed the yearly gain worst week for chinese stocks since october. we are weighing a slew of earnings to report today. a couple hundred more next week as well. i want to show you what's happening in japan. the nikkei fluctuating ahead of the 10 day holiday, the longest public holiday we have seen in japan since the end of world war ii. the markets will be out of action for some time. south korea weaker. we had that gdp miss yesterday. india will be closed on monday.

slightly higher in late trade. australia fairly flat after the holiday. it has been a bad week for asian equities. let's look at currency moves. markets have been focusing on the one after president xi was speaking. aty want to keep yuan stable an equilibrium level. the dollar.gainst the end fairly steady. we have been seeing a lot of money going into this currency ahead of the holiday. .retty much the only trade margin traders have bought $2.09 billion worth of net loss, about 209,000 contracts in the yen. this is after the longest positions we have seen in the end before these -- before the flash crash. bad week, on had a track for its worst so far this year due to strength in the

dollar and the fluctuation in oil prices. nejra: thank you. the earnings at the top of the hour, let me also get to wpp. first quarter comparable organic sales down 2.8%. the company compiled estimates for a drop of 2.8%. the full-year guidance is unchanged. the company does say it is facing a challenging year. the struggles seem to be continuing at major business losses starting to bite. i fall in first quarter sales after agencies in north america work with tech clients. another reminder of the challenges facing ceo mark reed. ,oining us now to discuss global director of equity that mng. let's kick off with the banks. we have just had a number coming

through. we heard from deutsche bank earlier. brought therbs, i first quarter operating profit pretax, that was a beat. also another redhead line coming through just about now. rbs sees income growth more challenging in the near term on brexit. yesterday of course we heard mcewan is going to be leaving. i talked to jonathan yesterday and he said he good turnaround story, the next two years are certainly not going to be as interesting for rbs. would you agree with that? >> absolutely. ross mcewan has done an excellent job. what you want to see in a turnaround we have. i did not expect them to go out on a low having achieved that. now,u look at the future

the next two years we have brexit, we potentially have scottish independence rearing its head. the potential of a labor government. what happens the next two years is outside of his control. his last five years have been in his control. >> what would your take be in general? let me put barclays outside that for a second. positivegenerally be if you take brexit into account as well? >> if you look at valuations, absolutely. brexit is already priced in, hard brexit. i think we can take a step back and say the economy is still growing. it still remains strong. >> you have investment taking income there. the flow in europe is slow. it is a question of how slow

they can take out the costs. nejra: that came up yesterday. numbers this morning and we got that guidance on the revenue as well. merger talks are no longer happening. unpalatable was the word bloomberg news used. no cross-border merger happening to either of is there much he can do here even if he comes out with a new strategy which some are saying he might? >> no. we have seen the trading flow is much lower in europe that has been in asia. that's why you have seen the -- the dichotomy in the results of different banks. the ecb is in their policy of trying to keep rates down. the cost of capital spreads just

decrease and decrease. posting very been strong results. >> how do you sort of approach at mng? are you favoring certain countries over others? are you favoring them based on how much of the businesses wealth management, et cetera? it is outside of banks' control. when you look at commerzbank, it can get cost down. the retail business continues to flow. you probably favor banks that have it in their own hands as opposed to markets. nejra: let's talk about tech as well. a lot of earnings coming out. pick of been your top what you would be interested in? >> i have like microsoft the last five years. tech, the bigross

thing out there now is cloud. aws, 42%. microsoft, 72%. andrd the cloud digitalization. the one thing about microsoft results is the operating margin increased at the same time. they have reached that critical mass where the investments have all gone in. you can grow at these rapid rates and at the same time you have the utilization. you are in the absolute sweet spot. that is why the $1 trillion market caps. you areicrosoft positive on an cloud as part of that story. we did not see quite a positive report from intel even though there is some element of cloud in that business. the shares closed flat with amazon because there were question marks over the spending on their delivery service.

our the high-margin parts of the business enough to offset concerns around spending and the impact on profit? in the last five years have you asked that question? every single time, this management team have executed and beaten all expectations. they have this in their dna now. the only difference is now it is a much larger company. moving the needle gets trickier. intel is still far behind the curve when it comes to the shift in where the chips go. mobile has seen all the growth. pcs have been slowing down. samsung yesterday announced 110 billion capital program for their chip business. the competition is rising for them. thank you so much for joining us this morning. get the bloomberg first word news now.

>> the u.s. has reportedly mulling a concession on drug production in trade talks with china. agreementotential would give companies eight years of regulatory protection in china compared to the 10 years nafta andn the new the 12 years they get in the u.s.. uber is aiming for a valuation of 80 to $90 billion in its ipo, just above its last private funding round. the ride-hailing company is looking for $44 to $50 per share. final details and pricing's still change. uber isn't -- is expected to set the terms as soon as friday. theresa may's plan to keep britain out of the european elections next month looks all but dead. bloomberg has learned the prime minister is unlikely to put her brexit deal to parliament next week. she could run out of time to get

it ratified for the vote kicks off may 23. may was desperate to keep the u.k. out of the elections. it could be damaging for her conservative party. bonds have fallen into distressed territory in argentina as the chance of default rises on concerns the president will not be able to fend off his populist foes in an election this year. this was another setback for the south american nation back in recession. inflation is above 50%. global news, 24 hours a day on air and @tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. nejra: thank you. let me recap the numbers we have had in the past 13 minutes or so. let me get to sony. another redhead line coming through. headline of income

¥10 billion, which was a miss on the estimate. 2020s pulled it's for your electrics and entertainment mayating target, given 2018. that has come through. ultimately, it is forecast -- it's forecast has missed estimates with the ceo seeing a tough year ahead. that's the key take away from sony. turning to rbs, it is seeing its income growth more challenging in the near-term on brexit. first quarter operating profit pretax did come in at a beat. beating the estimate of 900 million pounds. it is saying that income growth is going to be more challenging near-term. that is what we have seen come through. outlook maintain the guidance, we recognize the ongoing process of brexit uncertainty and associated delay in business and decision is

likely to make income growth more challenging in the near term. we will talk more on markets and also the european economy next as we look ahead to the spanish elections this weekend. taking a look at how futures are set up in europe, u.s. futures flat. 40 minutes away from the equity market open. this is bloomberg. ♪

nejra: 7:20 in london, 39 minutes from the equity market open in europe. let's get a check on the markets. we are heading for a second week of gains for the dollar into that u.s. gdp print. yuan rising. the central bank stronger than president xi jinping pledging against currency depreciation.

oil is weaker today. onrall, even though we are the back foot today, oil heading for an eight week gain. we saw tech stocks gain yesterday. microsoft and facebook in particular. strong earnings from amazon, which might affect the nasdaq. the nasdaq did hit a record in yesterday's session. euro stoxx 50 futures on the front foot. rebound.see a the 10 year bund yield stays in negative territory. today we are asking, have chinese stocks peaked this quarter? you can join the debate, reach out to wes and the team -- to us and the team on your bloomberg. polls and there is one issue dominating the campaign. that is catalonia. the fallout from the region's failed bid for independence could leave the country facing more political deadlock. the governing socialist party and anti-astarte are more open

to a dialogue with catalan parties. the more progressive solutions range from self-government to a potential referendum. the country's conservative -- tos see less catalonia. thank you for joining. we go into the selection with the spanish economy on a fairly firm footing. one of the outcomes that could happen all -- happen out of all this is a hung parliament. there has been an impressive recovery. could that continue? >> if you think about it the last four years, they have a lot of political stability. this is the third election in four years. the assumption is the spanish economy can be almost autopilot in away. concerned one is too the outcome will derail economic growth.

are thehe key concerns labor market and pension reform. the labor market, if you look at the item limit rate in spain, that's not looking pretty. has at something that chance of improving in the near to medium term? issue for 30een an years. notes, nooned in my government has been able to take the labour party despite efforts to do so. there has been a lot of concern. i do not see any real quick fix. economies.stern definitely of spain, long-term. short-term politics in our dominating strategic thinking we need for this kind of vision. look for example at italy's premium against

spain, the has been moving higher. it does suggest from an investor perspective, they do not see spain in any way as relative to italy. have markets generally -- are they right to be calm going into the selection? -- this election? >> spain has done a lot of reform efforts. i do not think this is a country where political fragmentation means it is a real danger to the economy. i think the bond markets in recent years, it is hard to tell how much is complacency and how much is the ecb's backstop. spain is being rewarded in bond markets as we see it. you mentioned the ecb as well. how much is spain benefiting from ecb policy? outlook, judging by markets,

does not look like we're going to get a raise anytime soon. >> loosening financial conditions have been a tailwind that benefit spain, cup mind with lower oil price until now. -- combined with lower oil price until now. the ecb looks to be taking a lower for longer stance. that will be how growth in the short term keeps span -- keeps spain outperforming. nejra: to the euro this week has hit an almost two-year low. data out ofidence germany and france. for a see prospects second half of the year? >> given the way the fed in the u.s. is looking a lot more dovish and the way perceptions are changing, we can stall for the euro a bit. it does not look like the euro has room to go a lot higher.

the prospects are weak in terms of growth and inflation. you mentioned you are expecting this lower for longer. tros about your take on tl and tiering? have been announced. we need to see how much banks take it. i think there is still a lot of discussion. there is a lot of debate. i'm not convinced there is going to be any announcement anytime soon. it clearly is becoming part of the conversation. nejra: thank you. continues.ason stay with bloomberg for the best interviews and the numbers at daybreak. later this morning, we speak the chief executive of electrolux.

do not miss that interview after 9:00 a.m. london time. futures positive. this is bloomberg. ♪

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anna: good morning. welcome to "bloomberg markets the european open." matt: today the markets say bring on the deluge. european futures point higher ahead of the open after a swath a swatheve -- ora across autos. away.rade 30 minutes