>> this is bloomberg daybreak europe. these are the stories that tell your agenda. no hurry to cut.

jay powell says the fed will be patient before lowering borrowing costs. in today's key data on u.s. inflation. reeves and the red, the fiscal watchdog downgrades growth forecast eating up the chancellor's borrowing margin and piling pressure on the growth agenda. a boom per day of earnings from europe's biggest firms. results from heineken and interviews with leaders from different companies. lizzy: good morning. we kick off with breaking earnings from abn amro, that such bank coming in at 2.4 billion euros, the estimate for two -- 2.28 so beat there. focus on net interest income and the cost outlook.

cet1 ratio coming in for the fourth quarter at 14.5%, estimate for 14.1% and profit for the fourth quarter of 397 million euros, estimate of 448 point 5 million euros. in this on profit -- on this on profit but the ecb cutting rates and we are looking out for a name for the new ceo. will we get an answer from the ce -- the cfo in about 10 minutes? let's wait for that then switch to another set of earnings breaking out of the netherlands, heineken, the dutch brewer full-year organic beer volumes 1.6% higher than the estimate was 1.39% so a beat there, adjusted net revenue, the estimate was for 7.5 3 billion euros so i'm this there but heineken saying the four year 2025 adjusted operating profit

for-8% of organic growth. that is the latest out of heineken. earlier in the week we had profit and we will get results from the world's biggest brewer on february 26 but a lot more on those numbers from heineken's ceo at 7:30 am u.k. time, don't miss that interview. the broader markets, as we think about how those stocks will open later in just under two hours, future is pointing higher in europe but flat to the downside stateside as we await the u.s. cpi print dropping as it does between jay powell's testimony. we had day one and will -- if we look, we can look at the impact on treasury yields, steepening of the curve. yields climbing off the back of the first half for .54% is where

we trade currently on treasuries. the dollar fell but currently a touch higher, brent trading at $76 per barrel on this rising u.s. stockpiles but we await and opec report later in the day. we have gold weaker now but a very volatile session yesterday. as traders parse the various threats when it comes to tariffs and the central banking story. a fresh eye on gold yesterday, but 2886 is where we trade currently. in asia, avril hong is on standby in singapore with a look at how tariffs and tech ripple through asian markets. avril: those are the main drivers for asia today. we saw the benchmark for the region, mostly negative territory amid the caution given some of these hawkish comments from powell and tariff uncertainty, clawing back some of the earlier declines.

in the green now but i think this is mostly driven by the optimism surrounding chinese tech names. we are seeing japan back from a holiday, the nikkei looking flat, the japanese yen declining for the past three sessions. you get the sense may be the rally over the past week went too far, too fast. the boj's january rate hike, the subjects surrounding that would say in the absence of tariff noise, given the uncertainty, where this leaves future boj rate hikes. for the board there is a lot of chinese tech optimism. alibaba jumping by the most since september amid reporting it is tying up with apple to offer ai on iphones in china. and beating of the competition that was previously binding according to reports -- baidu according to reports. tencent, another beneficiary of

china's ai optimism. lizzy: avril hong, thank you for the update on asian markets. back to the earnings, earnings dropping from siemens energy, first quarters coming in, the estimate was for 12.9 9 billion euros so a beat there. first quarter revenue eight point nine 4 billion euros, 8.5 4 billion euros ended still sees comparable sales up 8% to 10%. those are the earnings given the backdrop that the shares have nearly quadrupled in the past year as the boom in the boom in ai has driven orders for circuit breakers and transformers to really service new data centers. at the same time they have had progress resolving issues with their wind turbine units so we will dig into that more later in the program. let's get back to the macro story. fed chair powell going to give a

second day of testimony today, already telling congress the central bank doesn't need to rush to adjust interest rates, saying officials will be patient before using further. >> without policy stance significantly less restricted, restrictive than it had been and the economy strong, we do not need to be in a hurry to adjust our policy stance. we know reducing policy restraint too fast or too much could hinder progress on inflation. lizzy: let's bring in valerie. we didn't see much of a change to the rate cuts off the bat but will we see more from day two or the cpi print? >> he repeated a lot of the lines he told us in his january press conference. not a lot of new news from powell, reiterating they are in no rush to cut interest rates. he attempted to wade into the

politics and the q&a but again, he pushed back on it, saying they don't speculate on any of these economic policies coming out of trump especially when it comes to tariffs. he said it remains to be seen what policies will be implemented. it would be a responsible to speculate. he said sometimes tariffs affect the consumer, sometimes they don't and it is too early to tell. he said inflation expectations remain anchored and to that, we have inflation hitting the tapes today, 1:30 u.k. time, expectations for a 0.3 reading for core cpi for january, an uptick from the december reading of 0.2%. if we look at the last chart, important to know we don't want to get the strings of 0.3's which takes us further from the fed's percent annualized cpi target. we are due for a firm reading with the uptick to 0.3% today.

lizzy: thanks, valerie. as we look at the second part of jay powell's marathon testimony in congress, the breaking across the terminal out of banko bp, it raised its offer for anima to seven euros per share, anima holdings in the deal potentially , we have had banko bpm announcing its fourth-quarter net income of 224.6 million euros, a beat on its estimates of 178.4 million euros. fourth-quarter revenue 1.4 3 billion euros, a beat on the estimate of 1.3 6 billion euros. and a final one, net interest income 855.3 million euros for the fourth quarter compared to an estimate of 830.7 million euros. so a beat there as well but we keep an eye on this offer for

anima, seven euros per share. a busy day ahead, plenty on the docket, some of what we are watching out for. the opec monthly oil report coming up later today at 1:30 london time. the latest u.s. cpi rating -- reading out of the states, and then adding on to what powell has said we will hear from the atlanta fed raphael bostic as well. get a roundup of the stories you need to know to get your day going on today's edition of a break. -- daybreak. we have plenty more coming up on the program, not least getting into those abn amro earnings with the cfo. plenty to discuss with him, next. this is bloomberg. ♪

lizzy: welcome back. it is 6:12 in london and we have had earnings out of the dutch bank abn amro reporting operating income for the fourth quarter that beat estimates, net interest income 1.6 7 billion euros, beating the estimate of 1.6 one billion euros so a slight beat but i miss when it

comes to the outlook for net interest income, 6.2 billion euros for 2025 compared to 6.4 billion euros. so let's get into it with ferdinand, cfo of abn amro. great to talk to you. >> thank you for having me. lizzy: net interest income trajectory for this year, given we have lower rates from the ecb. >> thank you, first of all i think we had a good finish to the year if you look at our net profit in the fourth order. 3.9 7 million and it was supported by indeed, a continued high net interest income. but also, fees grew strongly across all client segments. both were up over 10% compared to the comparable period last year. your question specifically, we ended the year at about 6.5

billion, above where earlier announced guidance of 6.4 billion but clearly we expect a lower interest rate to have an impact on our overall outlook for 2025. the reference you made to the 6.2 billion, that is the lower end of the guidance we provided. we provided a range between 6.2 and 6.4 billion. lizzy: the upper end, would meet the estimate. let me ask what role donald trump's tariffs will play in your expectations for the outlook for this year. >> clearly come of the dutch economy is an export economy so clearly, the impact of tariffs will have an impact. it is wait and see how fast they will kick in. you might see frontloading in the first half of the year. we expect with the overall introduction of tariffs, that it

might have an overall disinflationary impact for europe. so it has an impact, but if we look at the dutch economy, they have shown to be resilient and it is also still supported by strong internal demands, both by government spending as well as an increase in consumer spending. lizzy: you up to in terms of deciding on buybacks and how you will deal with this year? >> first of all, we propose a final dividend of 75% -- $.75 and the dividend payout will be one euros 25 per share for the year. last quarter we said we would have an evaluation moment on our capital position at q2 and we will communicate afterwards. what is promising, if you look at our capital position, are quarter one ratio increased by 40 basis points to 40.5%.

the expectation is a base of four which we will report you roughly at the same level in q1. our evaluation for potential share buyback will then be based on the basis of quarter one numbers. lizzy: how much confidence do you have on credit quality going into this year? >> credit quality, if you look at the full year, we had an impairment release so you have seen over the past three years, almost zero impairment for the bank so that is evidence of a very strong credit quality of our underlying portfolios and those are the result of a strong de-risk we have done over the past few years. we expect a sort of gradual normalization of impairments, but for 2025, we still expect to wind up below our cost of risk

so that will be below the 15 basis points. lizzy: on your cost guidance, expenses have risen. that is partly why prophets missed estimates. you had expectations of higher costs, but expecting them to be flat for the year. talk us through these expectations. >> if you look at underlying costs, excluding one of incidentals, for the full year we were in line with guidance of around 5.3 billion and the second half of the year, costs were higher, as expected. number one, we increased our collective label -- labor agreement. you saw a net inflow of additional ftes where we were expecting to scale up on the second half of the year.

we do expect we have reached the inflection point of new higher and we are finalizing some of our more structural regulatory programs so that is why we are more confident in the outlook that we can remain underlying roughly flat cost base going into 2025. lizzy: we expect you to bring on board a new ceo at the end of april. i wonder if that is still the plan. the dutch stake is reducing its stake to 30%. what is the strategy going ahead in 2025? openness may be for some potential m&a? >> number one i'm very glad a new ceo is proposed but clearly, they are pending regulatory approvals. if the approvals are there, the expectations are that the ceo will be presented to shareholders at our annual

meeting. you are referencing the dutch state. they are reducing the stake further towards around 30%, so they are in the middle of a sell down program. that is evidencing they are very comfortable with the strategy we have chosen. on mna, we have an organic strategy but if there are any opportunities fitting our strategy, we are always reviewing that. evidence from last year, acquisitions, number one is one of the larger brokers in europe, and a more significant acquisition was a german company, propelling us to a solid number three position in wealth management in the german market. this is evidence of acquisitions where we can accelerate.

on our strategy to deliver. lizzy: interesting. one thing, any hints on who the new ceo will be? >> excuse me? lizzy: any hints on the new ceo? the new ceo? >> any news, i referenced the expectation is that marguerite will be presented to the annual general meeting but clearly, everything is still pending regulatory approval. really looking forward and i think it is also a good transition. rupert is still acting as ceo so it be a proper handoff to the next ceo. lizzy: ferdinand, thank you for giving us that deeper dive into your earnings this morning. looking at futures pointing higher in europe on u.s. stoxx 50 futures, higher and flat on

the ftse 100 futures but pretty flat as well stateside, the -- to the downside as we await the cpi print. traders wait for a second round of testimony from jay powell in congress. not really doing much to move fed bets for this year, only one can't fully priced for the rest of 2025 as things stand but will that change after the latest inflation reading later on? plenty more coming up on the program so stay with us. this is bloomberg. ♪

lizzy: welcome back. the ceo of ibm welcome to the disruption caused by aai startup deepseek. he said the reckoning over the cost of developing ai models will help fuel the adoption of the technology. >> we have been at this point for a long time. you don't have to spend so much money to get these models. if you are willing to make fit for purpose models we believe the path should be in the millions are not the hundreds of millions. how do you distill models down to smaller sizes? get them unique for a purpose, then run them at 2%-3%, 30 times cheaper than the big models but

as accurate and as good for domain specific tasks. >> do you think there could be a day of reckoning for some of these big tech companies spending billions, tens of billions on capex spending funds? >> that is probably beyond my ability to compute but i can tell you the usage will explode as the cost comes down. maybe if there is enough quantity increase that it maps out on the right way. >> you have always supported open-source models and i wonder in the case of deepseek whether that actually served as a reason for the disruption to take place. would we not have seen deepseek come to the market had there not been open source models? >> i don't believe so. there are enough large models people are building, not in the hundred definitely in the tens and it is hard to imagine there is an ecosystem that doesn't have a large model to start from. ideas spread. this has been proven for 2000 years. once there is an idea, it spreads.

smart people make copies of it. >> let me ask about regulation. i started off asking whether innovation can keep up with demand. can regulation keep up with the innovation we are seeing in ai? >> i will go the other way around. too much regulation early stifles innovation. that doesn't allow those companies and those nations were regulation is having to succeed. we can look at the example, i think the eu is good at lots of things but overregulation sometimes is an inevitable run innovation and i think we should balance that. lizzy: one of our top interviews, ibm's ceo and chairman speaking to joumanna bercetche. our other top stories, ken griffin, citadel founder, criticized trump's rhetoric on tariffs, saying it sows mistrust

with allies after trump announced 25 tariffs -- 25% tariffs on steel and aluminum imports. griffin said he wanted to say thank you to elon musk for trying to/government spending. scott bessent is traveling to the ukraine to meet president zelenskyy and discuss securing critical access to minerals. he will be the first member of trump's cabinet to visit the country. those are some of our top stories. coming up, the u.s. and u.k. failed to sign the final communique at the paris ai summit. all of the details of that, 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,

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♪ >> good morning, i'm lizzy

burden in london and these are the stories that set your a gender. jay powell says the fed will be in patients, key data on u.s. inflation. the u.k.'s fiscal watchdog downgrades its growth forecast piling pressure on the growth agenda. siemens posts a record order backlog and seasonal booming demand driving growth. it is a miss on hiring costs. checking in on these markets as they stand futures point higher in europe. flat to the downside on snp,

waiting for the print before jay powell's testimony. yields are climbing, 10 year is 4.54, yen is suffering. 153 handle but oil a twitch lower. now we wait for the opec report and gold had a volatile session. let's get more breaking earnings out of softbank.

arm dipped in the third quarter, a loss of a billion yen. a whopping great loss. funding and adventure with openai the founder stood alongside donald trump and there are worries about his propensity for bet the house deals. a bit awkward behind the scenes of stargate. sam altman telling tom mackenzie elon musk's whole life is lived from a position of insecurity.

an interesting interview with tom mackenzie. let's go to him in paris where the u.k. and u.s. where among the countries that did not sign at the openai summit. >> we need international regulatory regimes that foster the creation of ai technology rather than strangling them and we need europeans to look with optimism rather than trepidation. lizzie: let's get more from tom mackenzie on the ground at the ai summit. what was the sticking point in this final communiqué? tom: countries signed on but the u.s. and u.k. say they will work

with the french but it was a headline when the u.k. and u.s. did not sign off. neither wanted to sign off, both having different reasons. harder questions on national security and responses to global governance. open ai, countries like china

and india signed. the u.k. was less comfortable. lizzie: that is the international relations but you've been having some juicy conversations haven't you? what else has been discussed innit? tom: there was the question of deepseek top of the list, no one saw this as a major game changer when it comes to changing the spend on the chips and the date or centers, we got split opinion on the development of ai.

not a silver bullet changing efficiency but the ceo in france said it was positive for companies focused on openai rather than closed. we got the offer from elon musk and sam altman's response when it took a personal twist. >> his whole life is from a position of insecurity. i feel for him. tom: it is getting personal between these billionaires. to some extent debate between these two distills a broader debate within artificial intelligence about who controls the technology that many expect

to be revolutionary. the feud between elon musk and sam altman is symbolic of the tensions amongst startups and nation states that the action summit. lizzie: tum, bringing us all the personalities behind the drama. economists reckon the outcome fell last year following a stagnant third-quarter with the budget leaving england on the brink of recession. let's speak to benedict low from bnp paribas, they join me in studio.

really interested in this because the latest estimates for rachel reeves headroom downgraded like the boe. how are you thinking about the u.k.? >> no growth picture is not amazing. we've seen a weakening of the currency and rates path is a trigger, rising rates environment. for u.k. stocks we think the -- the -- the current environment

for growth is not the best. lizzie: what are your takeaways so far? benedicte: earnings season is the best we've had in two years. surprise to the upside, have companies got another result so those are strong numbers. it has been helping the performance. lizzie: when it comes to tariffs we're are looking at equities, are we too complacent? benedicte: strong outperformance since december and eyebrows being raised, we remain

constructive but in the short term not as much risk. it is not if, it is when. lizzie: we've had retaliation from the european union's how do you position? benedicte: canada and mexico are a roadmap. longer negotiation and some countermeasure will last for longer. lizzie: the other element is the german election. how do you see that playing out? >> we see collaboration with the

social democrats, deregulation, boosted investment. the dax performance was strong last year in this year. mid-cap companies in germany, that is the index i prefer. lizzie: if the war in ukraine does and how does that play out for stocks? is it offset by the boost to

infrastructure? >> also boost in confidence in sentiment, shift of the consumer is strong. the ending of the war would help in europe sentiment. more positive than negative. lizzie: benedicte lowe, talking to me this morning. we will speak to a dutch retailer reporting fourth-quarter earnings, their guidance in 2025 so we will continue the conversation next, this is bloomberg. ♪

>> welcome back, we have

breaking news from china vanke, authorize working to help plug a gap and regulate $20 billion yuan and vacant land, a sign beijing is drawing a line in the stand so they don't suffer the fate of evergrande, so the latest in how authorities are

planning to help. csi 300 up 9/10th of 1 percent and that is the latest out of china. breaking earnings from a dutch retailer making up 20% extra and 4th quarter margin is 4.1%. compared to 3.97%. u.s. margin is a slight miss

and outlook aom in line with estimates, a barometer of the consumer. we speak to yolanda who joins me now. i want to start with the romanian retailer you bought. any updates? yolanda: very happy we closed. we need to be number one or two to invest in customers. we had 5 or 6 and now have 1 or

2, very happy and look forward to working together. lizzie: that gives you a leader position. what are you interested in taking over? yolana: low margins, so aquisition has to be strategic. no active plans. romania was a good fit but we're large in the center of the country and rural, so the fit is

unique. our total actions, we welcome them to the family. lizzie: would it be more likely to be u.s. or europe? yolanada: we have 2 big regions. we have strategy in the u.s. we are investing in 1000 stores so the first focus is growth and money, densify.

then m and a. lizzie: perhaps more complicated by the return of trump. how are you thinking about tariffs? yolanda: our brands profit from a stable world. we are lucky we have local businesses, 95% of businesses are sourced locally so we are monitoring but business in europe and the u.s. are sourced locally.

it is important to have spending which benefits our business. and customers. lizzie: you are a barometer for the consumer. food prices are rising again in the u.s., anything trump could or should do to bring down grocery prices? yolanda: we are not advising the president but we think it is important for society that inflation is moderate. our customers are focused on value, that's why we have investment programs in the u.s., investing in prices to ensure grocery stay affordable so it is very important.

it is the center of our strategy providing affordable, healthy food, the next big topic is our brand strategy. focusing to increase on brand product assortments. they have high quality at affordable prices so delivering value is central and everything a government can do to ensure inflation does not pique helps customers and us. lizzie: thank you, great to have you with me on daybreak. plenty more coming up, this is bloomberg. ♪ ♪ three little birds ♪ ♪ (steel drums playing lightly) ♪ (♪♪)

(♪♪) (♪♪) (♪♪) (♪♪) (♪♪)

>> trump needs to settle down and focus on helping families. that will put the fed in a better place. lizzie: elizabeth warren echoing what we heard and we have heard from jay powell, saying the fed can wait and see and you can see the fed bets are not changed. 1-2 fed cuts. we have more fed speak from

powell and bostick, the sentiment is hawkish. as we get cpi print, we will get back to the raft of earnings. heineken ceo and andrea at 9 am. a lot to talk about, the opening trade is next. this is bloomberg. ♪

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anna: good morning from london, one hour away from the opening