tom: this is bloomberg daybreak: europe. i'm tom mackenzie in london. straight to business. president trump signs executive orders on his first day in office and flags tariffs for mexico and canada but for now holding off on china. >> we are thinking 25% on mexico

and canada because they are allowing vast numbers of people. and fentanyl. >> markets react with the dollar trading higher while the mexican peso and canada's currency selloff. the new president is the talk of the town at the world economic forum in davos we bring you with -- in davos. we bring you interviews with key leaders. happy tuesday. wrongfooted, whipsaw, take your pick. this is the name of the game, volatility for the markets. european stocks pointing lower by .3%, close to .4%.

lines on potential tariffs for mexico and canada but nothing concrete on the tariff front and china so far out of the crosshairs. so far. we will see how that changes. ftse 100 futures pointing to modest losses of about .1%, s&p looking at modest gains of about .1%. you have the dollar up, yields down. we will see to what extent that divergence continues. treasuries are big, yields are down. the pound in focus, 1.22 as we lead up to jobs data at 7 a.m. u.k. time. wages expected to go up but not the real plans for the boe. the pound currently weaker by .4%. brent $80 a barrel and bitcoin dropping below the record high of 108,000 yesterday, currently at 101,000 dollars, down 1%.

donald says he plans to announce tariffs of as much as 25% on mexico and canada as soon as next month. he says the u.s.'s two immediate neighbors are allowing the flow of undocumented migrants and drugs into the country. >> we are thinking 25% on mexico and canada because they are allowing vast numbers of people. canada is a bad abuser also. >> when do you think you would enact those? >> i think february 1. tom: let's get more with john harney. the news floor out of this new administration, it's hard to get your hands around. how does trump 2.0 compared to trump of 20 in terms of how we think -- of 2016 in terms of how we think about policy going forward and the tone he has set> john: the atmosphere outside --

there is some jubilation even in the cold of washington. you have men in dinner jackets, women and downs -- women in gowns, going to parties, balls, etc. president trump struck i guess you would say a heroic figure. he alluded to the assassination attempt last year and said he felt he had been chosen by god to survive, not only to survive, and take office again. he spoke of a golden age he promised to bring forth and talked of various goals regarding immigration, government overhaul, bringing down inflation, energy policy, and it certainly was not a

bipartisan speech, but it was fairly magnanimous. then he went down to another part of the capitol and went into a diatribe against people like nancy pelosi and again railed about his loss in the 2020 election, claiming it was rigged, so you saw today, in those two speeches, his aspirations and perhaps wanting to establish a legacy and the old fixations and resentments that have been the hallmark of the last four years. tom: talk to us about what we understand about tariffs, then, because on one mark, no action on tariffs, nothing yesterday, but on another side of course, he did talk about canada, he did talk about mexico, 25%, and he

gave a date, potentially february 1. how should we understand the tariff policy of trump? john: this all came up during this remarkable session in the oval office as he was signing various executive orders and other actions. someone asked him about tariffs and he said, yes on canada, yes on mexico. this will certainly complicate, to say the least, trade with the two largest partners of the united states, canada and mexico. there's a lot of interdependence , particularly with the auto industry, which is very much involved in trade with those countries and the american auto industry and that could be bad,

could mean some real problems, if these tariffs go forward, but he said that drugs and migrants -- the flow of drugs and migrants has to stop, real progress has to be made or else, and the or else could come in early february. tom: john harney, thank you very much indeed on the first 24 hours of this new trump administration and how we should be thinking about the tariff threat and the other executive orders that have been signed off by trump in just a short time. the dollar bouncing back after posting its deepest drop in 14 months yesterday amid bets donald trump's tariff plans would spur inflation. let's bring in valerie tytel to dive into the latest market reaction to trump's day one executive orders. i talked about the markets being whiplash in the dollar was the channel through which that came through. valerie: it was a huge pain

trade for those dollar longs yesterday, but we are glad to see that the dollar is paring some of those losses in the overnight sessions with losses in the mexican peso and canadian dollar after that late-night terror threat trump gave the markets. yesterday, we know that those lawns, that speculative position -- those longs, that speculative positioning, dropped steeply on reports that we would not get any hard and fast tariff announcements out of the gate. we had a relief rally overnight in the dollar and also when it comes to the treasury market, this lack of any concrete announcements on tariffs. it's given some room from the tariff -- for the treasury market to recover.

tom: currently yields down and tariffs up. the dollar is surging up .4%. valerie tytel on the market reaction when it comes to the dollar and treasuries. let's get the asian market reaction with avril hong in singapore. to what extent is their relief in the chinese markets that we have not yet at least had any concrete action in terms of chinese tariffs? avril: i think that's exactly what you're seeing in the equity space, the idea that we are not seeing china being targeted specifically on day one, so ultimately the impact from tariffs could look different verses if we were to see this aggressive approach on the get go, so the chinese stocks are extending gains we saw a day ago, although there are lingering concerns that after canada and mexico, china could be next, so we are seeing the

pairing of earlier gains on the hang seng. in terms of the rest of the region, it's a pretty mixed picture. energy stocks the worst-performing as well. let's walk through what we are seeing in fx quickly. we are seeing the renimbi flat today despite the rebound on the greenback. it's interesting to note how em currencies in asia and the yen are gaining ground. for the yen, this is very much about how trade expectations are still that the boj will hike credit. tom: looking ahead to the boj and whether they have the space to hike again. we know officials and policymakers there are also looking at trump actions as part of that determination. avril hong in singapore on the market check in light of what we are seeing so far from this new administration. we have a great lineup of guests from the world economic forum in

davos. coming up, jenny johnson of franklin templeton, christopher wilcox, and mario greco. they will be interesting. this is bloomberg. ♪

tom: welcome back to bloomberg daybreak: europe. the world economic forum in davos is taking place now in the shadow of donald trump's the white house --donald trump's return to the white house.

francine lacqua is on the ground and joins us with another guest. >> thank you. joining us is jenny johnson, chief executive of franklin templeton, and i have to say it's cold, colder this morning then yesterday, but at least it wakes us up to try and figure out the world economy and everything that goes with it. a lot of the participants were looking at the inauguration. a lot of the bankers are expecting the regulation -- expecting the regulation and donald trump to not kickstart because it is doing ok but better the economy of the u.s. jenny: the view on trump is very clear that he once less regulation. he said that for every new one enacted he will take away two regulations so i think that is positive for business. i think you will continue spending --i think he will continue spending, which is positive in the short run for an economy. we do have a concern with the debt.

and he will extend tax cuts so i think people will view that is positive. there's rhetoric around the tariffs and the reality is two things. one is he's a dealmaker. if you are a dealmaker, the first thing you do is show your powerful stands, so you make a broad statement -- i'm going to tax canada and mexico by 25%. then you get them to the table and you say this is what i need. i need some help on immigration, i want you to import more of our goods, so i think we have seen that's his kind of approach. he makes broad statements of on going to by greenland and from there goes in with a more practical approach. francine: is there a danger that if you are a ceo you don't invest because you are never quite sure what his policy and was negotiation tactics? jenny: i think most people have a clear -- well, i don't know -- i think you understand under the

covers because he makes his statements. in europe, he wants europe to import more from the u.s., particularly energy. he wants help on funding from nato as far as military funding. he probably wants them to lay off a little bit on the tech companies. so there's an understanding of what is desire is and so then you get to the table and start to negotiate. francine: is it possible to know whether he's better for public markets and private markets? jenny: i think a view is that he's going to be good for the economy and that therefore is good for both public and private markets. francine: what are you seeing in private markets? jenny: you're starting to see more movement on ipo's, which is good for the private equity business. the areas i am most focused on is the area i think has tremendous opportunities, secondary private equity. there has been so much deployed in private equity. there's about 150 billion

deployed in secondary private equity. i think they deployed about 70 percent of their fund with large discounts, more than 60 percent the average historically. they think it's a really interesting opportunity. francine: mainly in the u.s. or do you think there are other parts of the world? jenny: and the secondary pe space you are seeing it all over. and -- in real estate, that's more of a u.s. issue.

but in the u.s. it was the regional banks who were the primary lenders and they are just not able to lend like they used to. francine: there's so much talk about crypto being at the center of the trump administrations mandate. this has everyone excited. does it change the appetite for etf's? does it impact your company? jenny: it's important to think of blockchain as a technology, it's a programming language that does certain things really well. i think it's likely that etf's and mutual funds will ultimately be built on blockchains because it's efficient. then there's the crypto world, some of which i think has tremendous opportunity, and some of which i think will be noise. it will be like the dotcom era,

where you had some of the biggest companies of the next decade come out of it and others that blew off to one side. with a trump administration, we will see them converge more, traditional financing crypto, which we need. we need them to come together. there's great innovation the technology enables. francine: will that be overlaid by inflation? jenny: if i were to predict i think that you could have, at the end of 2025, the 10 year and 5%. and, by the way, from 1950 to the gfc, the neutral rate on fed funds was 5% and the 10 year 5%. that's more normalized. that's what we will see. i think the fed is going to pause.

this gives them time to see how trump's policies impact the economy. some of them can be inflationary and the u.s. consumer is still very strong. the inflation numbers. unemployment is still pretty low so the inflation numbers are pretty sticky and i just don't know that we go back to that period of much lower interest rates. jenny: but -- francine: but that again changes everything, which is why you see opportunities probably higher for longer. jenny: but it's a much more normal rate. and i think, for example, on the private equity in private markets side, it was easier to make money when cash cost nothing. now you have to be skilled because your kerry caused of -- your kerry cost of, say, five to 8%, you have to be good. francine: the integration of western. how is that going?

jenny: we are working through the integration of western, yes. we have done it i think now -- we have been integrating putnam investments and there's less integration that happens on a private market acquisition than a traditional acquisition, so we have been methodically going along. francine: is the plane quicker than expected, slower? jenny: probably quicker because we were not planning on it until july 25 and have now started earlier. francine: are you happy with the progress you started earlier? will it finish earlier? jenny: it's definitely a positive. or home model is to keep the invest -- our whole model is to keep the investment team's independent and to build around them. we -- on one of the acquisitions, are private credit manager said when franklin bought us we thought they would help us on distribution but now

with ai and the cost of data i realized we could never participate at this level without the scale and breadth of franklin templeton. francine: there's been an issue with one of the managers there. any updates. jenny: we are still working through it. francine: thank you for joining us. the first davos. we have to catch up at the end of the week. jenny: so far, it's great. francine: jenny johnson, ceo of franklin templeton. we will send it back to you and have plenty more from davos. it feels like day six but it's actually only day two. tom: stay warm. great conversation. francine lacqua, thank you very much indeed. 20 more coming up with an from fran -- plenty more coming up with and from fran. christopher wilcox, executive head at nemura holdings joining

us to discuss the outlook for dealmaking and then we will speak with one of your a's largest insurers -- of europe's largest insurers, mario greco, on the state of the insurance industry. don't miss those conversations. lots more coming up. stay with us. this is bloomberg. ♪

tom: welcome back to bloomberg daybreak: europe. we have some breaking news. a potential tie up between generale and natixis. this is looking at a 50-50 joint venture. that parent group including natixis. sonny a nine signing a -- signing a deal. it will be owned equally by the two companies. keep across this story -- we will keep across this story. gener ale in focus. could be in the process of creating one of the largest asset managers in europe if they

get this deal across the line. senator marco rubio has been confirmed as donald trump's secretary of state, the first of the u.s. president's second term nominees to be approved. rubio served 14 years on the senate foreign relations committee and is one of trump's more conventional cabinet choices. he was cleared by a vote of 99-0 in the senate as a sign of the rod support he has among colleagues. president trump has ordered the u.s. out of the paris climate agreement for the second time. the withdrawal take a year but signals from's commitment to overhaul u.s. energy and i'm a policy -- energy and climate policy. the specter of the world's second-biggest polluter leaving the accord has shaken global climate diplomacy. orsted has a $1.7 million hit on its earnings as the cost of wind farms keep rising.

is the latest in a long series of issues for the danish company. it comes as the industry faces up to president trump's vow to immediately stop leasing areas for new projects. coming up, our davos conversations continue. this hour, christopher wilcox, executive officer and head of whole say that wholesale at nomura. the way i approach work post fatherhood, has really trying to understand the generation that we're building devices for. here in the comcast family, we're building an integrated in-home wifi solution for millions of families like my own. in the average household, there are dozens of connected devices. connectivity is a big part of my boys' lives. it brings people together in meaningful ways.

>> good morning this is bloomberg daybreak: europe i'm tom mackenzie in london, happy tuesday. president trump science dozens of orders.

tariffs for mexico and canada. holding off on china. >> 25% because they're allowing vast numbers of people to come in. tom: mexico's paso higher. we bring you interviews and reaction over the next few hours. brace for volatility. this is the new set up. stoxx are lower, questions

continue. currently up, nasdaq futures gaining. yields down, yields are down, wage data and labor data is out. u.k. could be heading for a debt death spiral. bitcoin punched through, falling. bankers got back on their feet, global transaction values are up

, waiting to see whether trump will turbocharge or temper recovery. haslinda is in davos. >> what will it mean for markets , terrace for canada, mexico how are you reading all of this? >> we've heard this story on mexico and canada. trump seems to be having tariff conversations.

the first is tariffs in the second is supply-side measures. will the fed have to reassess his moves? >> policies will be inflationary. having said that, tariffs don't

have to be inflationary. >> the environment for deals, big recovery.

the boj, we expect. >>

i don't think we will see the same disruption. dollar-yen will strengthen and come down based upon narrowing differentials but our view, there is more to it. >> obviously a stop on the way is 145. [laughter] >> more risks right now. >> given the macro view how do you position?

>> we have a strong dollar view. >> before we let you go, china

will have to engage in stimulus. we saw the impact on the markets, probably not enough, it's going to have to be cleared up. the currency will depreciate and the government will need stimulus. the -- the -- the -- the real estate, uh, um, problems reflect

and we think we will see action and confidence. i've been around for too long. >> christopher wilcox, head of wholesale, i think volatility is the wud. tom: no floor around china base for now, great conversation on the ground for us. we will speak with europe's largest insurer, the ceo of zürich insurance next. this is bloomberg.

tom: extreme weather events are among the top. the fires will cost tens of billions of dollars with an

insurance crisis. francine is on the ground. francine: joining us is a chief executive officer of sarah -- zürich insurance. we will talk about los angeles in a minute but what do you think this will mean? do you regulation, will europe have to catch up? >> it has to wake up and do it because u.s. is moving, asia continues to thrive and so europe is asleep and has to wake up. francine: what do you do?

>> europe is behind on investing in technology, ai, digital, corporations is changing and europe has to move quickly, europe is not one market. i have hopes. >> will -- will -- trump and the lighthouse will that we care about? guest: we are pretty much back to the wall, so i hope actions

will be taken and reports pointed in the same direction, this is the time. francine: how much does it cost to zürich? guest: not much. we are not present in california and to farmers this is an event to prepare, they've seen this kind of event before. what farmers has been doing with the government is trying to mitigate action. more needs to be done. these are repeated events and dramatic, terrifying.

this must be re-planned. they invest heavily this is the

way moving forward to do this. >> are there more climate related events that will cost billions? guest: we have built this society in a tight way, there has been massive destruction and we can fix these things if we act now. we are not shy of taking risks, a lot of what we're doing is about prevention, avoiding these situations.

we don't come with the check when the damage happens. >> does ai help with that? >> it does, it does, it does, it does. it helps us help the customers. governments have to hear and listen to the messages. >> that was mario greco and i will send it back to you. tim: francine on the ground, thank you and plenty more coming up. some other stories this tuesday, rachel reeves will meet with ceos hoping to persuade them to

invest, bloomberg learned the government is preparing to improve expansion as part of a push to spur growth, part of a push to advance planning decisions on projects. persistent inflation and borrowing costs lead consumers to hold off on buying vehicles. car sales grew 0.9% in electric vehicle sales fell. automakers face a storm this

year. iphone sales in china dropped 18.2%, a major setback. apple was surpassed in china. the drop has been put down to the lack of ai features. give you a preview of the jobs data, and give you a check on tariff speculation from trump. this is bloomberg.

>> i have the right to sell it and we will make that determination. a lot of people would be interested, 25% on mexico and canada, canada is a bad abuser. allowing huge numbers and drugs. china charges us tariffs, until i came along china never paid $.10 to this country. we need people and i'm fine with it, we want to have it, we need

it. we're the only country that does this with birthright. ridiculous. tom: some of president trump's borders during the signing ceremony engage with volatility around tariffs. this is the roller coaster ride, big drop when it became clear and then a spike and comments around canada and mexico so

continue to watch the dollar as markets try to understand the tariff agenda. out of the u.k. focus on wages and unemployment going up, wages is expected to take up. this will not derail the boe cut coming fru in february. alternative data suggests a cooling. let's look at netflix, close to 30%.

subscription rate you've got squid game, numbers coming through. a flurry of measures from trump and we continue that analysis next. opening trade is next, this is bloomberg.

the way i approach work post fatherhood, has really trying to understand the generation that we're building devices for. here in the comcast family, we're building an integrated in-home wifi solution for millions of families like my own. in the average household, there are dozens of connected devices. connectivity is a big part of my boys' lives. it brings people together in meaningful ways.

i'm anner edwards alongside guy johnson and kriti goopter. donald trump signals tariffs while holding off on china