>> good morning. this is bloomberg daybreak europe get three days ahead of germany's election. mercedes releasing full-year numbers as we get a gauge on

japanese crucial auto industry. oliver kirk standing by to unpack the results as well as the latest on the election race. 6:40 am u.k. time. i will be speaking with the get your guy ceo on the german tech ecosystem. 8:30, we check in on the energy space with di w research. first, here are the stories that set your agenda. president trump says a new trade deal with china is possible, touting his great relationship with xi jinping. stocks in asia drift lower. donald trump steps up his attacks on ukraine's president saying volodymyr zelenskyy is doing a terrible job as the u.s. pressures kyiv to accept a deal to end the war. plus, europe's automakers report. earnings from renault and mercedes.

the earnings dropping right now with a focus on right now. full-year operating margin coming in at 7.6 percent. slightly softer than the estimates of 7.74%. this stock has performed well over the last 12 months. up over 40% as they navigated challenging situation when it comes to global automakers. some other lines crossing in terms of the dividend. full-year dividend coming in at tour euros $.20. below the estimates. free cash flow for 2025, around 2 billion euros. again, the operating margin, softer. full-year revenue coming in at 56.2 billion euros.

that was above the estimates of 53. just shy of 54 billion. net income coming in softer for the full year. net income of 752 million euros. the estimates have been for 1.7 2 billion. big mess in terms of full-year net income. revenues were stronger than the estimates. a couple of key lines coming through from renault. let's switch focus to the german automaker within the luxury space. mercedes has performed very differently. currently down over the last 12 months by about 3%. mercedes sees 2025 cars adjusted ros at 6% to 8%. the estimates had been for 7.91 percent. in terms of full-year profit, coming in at 10.4 billion euros. the estimates had been for 9.87 billion euros. profit coming in higher-than-expected. they expect to see buybacks of up to 5 billion euros up to 24 months. let's bring in oliver kroger right now who has been breaking down the numbers for us. constantly has the finger on the

poles of the german auto sector. talk to us about what the numbers say to you and how challenged this automaker is. >> the top lines here, there were a couple of beats in terms of what we were looking for in terms of profit and the margin. the margin did better than anticipated. 8.1%. estimate was 7.1%. we should put this in the broader picture. this is a company that has reported numbers down in double digits in almost every sort of sector. revenue down 5%. earnings, ebit down 30%. net profit down 30%. free cash flow down 20%. earnings-per-share down 25%. this is the picture right now. those are the numbers. what we are also getting is a cost-cutting plan. a performance cutting plan. they want to cut costs 10% by 2027. you can read that. this will add to the industrial difficulty story here in germany. when we look at terms of the outlook for -- you mention the

return on sales. they are expecting six to 8% again. this is a carmaker that likes to get those numbers into the double-digit percentage returns when it comes to their actual sales. their buyback policy will buy back a billion dollars worth into the next two years. we look at the outlook. we look once more for any sort of sun on the horizon. it doesn't appear so. they are expecting a bit to be significant below last year's level. overall, a couple of beats within the numbers here but a very negative story. it seems like a cost-cutting plan has now arrived. tom: that is key, isn't it? the cost-cutting plan plus the guidance for 2026. potentially a challenging thing to look through that, given the geopolitical and trade tensions that exist now between europe and the u.s. talking of which. that folds into the debate here in germany ahead of the election. where do things stand 3d -- three days out from that clue -- crucial vote? oliver: the most remarkable part

of this election is that nothing anybody does seems to change the polls. that's what we've seen for the last three months. the cdu holding up 30%. afd at 20%. you've got spd coming up a little bit. going into this election, what we have seen is basically very solid numbers that have not moved a lot. this was a point made in the debate last night. frederick mers considers himself the victor of this election. i would caution that a little bit. everyone i talked to in germany, a huge proportion say they don't really know who they will vote for in the election. we see it in the polling. a large proportion of the population has not yet decided. that doesn't mean that there will be a large up swell. this is a new scenario where the afd is doing well. we don't know how forthcoming people are going to be about whether they will vote for the afd. it could mean a diminished number for the cdu. if that falls significantly, those can be redistributed across the spectrum. that causes a very difficult coalition discussion in germany

which will take at least a month to form a government. everyone says a month is really fast. tom: morgan stanley saying april at the earliest. undecided voters, if you put those two statistics together, it's around 30%. a significant number. turnout is typically pretty high in germany. 76% last time around in 2021. oliver crook, thank you very much. breaking down the earnings coming through from mercedes. that is so central to the economy and the challenges in germany and how that ties into the politics as well. going to bring you all the news and analysis and market moves as we continue to build up to the german elections including a special program when polls close on february 23 live from berlin. let's get to the markets now. you saw european markets dropping yesterday. 9/10 of 1%. having hit record highs the day before. today, you're treating looking

flat essentially. european futures searching for direction. the increase to applicable tension between the u.s. and ukraine is not helping sentiment. modest gains of 1/10 of 1%. s&p futures having notched the s&p 500 a fresh record high yesterday with gains of two tons of 1%. currently looking lower by 3/10. nasdaq 100 futures also pointing lower by four tents of 1%. let's have a lacrosse set. we've been hearing from fed speakers. we had the minutes of course. this is a view that this is a federal reserve that's in no rush to move forward with additional cuts. mike -- market pricing between wanted to additional cuts this year. 451 right now on the benchmark tenure with yields down to basis points. euro-dollar at 10 four. stronger by 1/10 of 1%. rent down two tons of 1%. bitcoin in focus with additional trump comments supportive of the crypto space. 96,800 currently. let's cross over to asia right

now and check in with april hall in singapore for a guide on the asian markets. avril: we are seeing asia stocks down again today. no thanks to those the applicable tensions between the u.s., ukraine tier of talk. trump is saying it's possible a new trade deal with china. those fed minutes also not helping. but today, the key test for hong kong markets will be those alibaba earnings. this is a stock that has ramped sick 2% since the january lows. options traders expecting bigger than usual gyrations if those earnings disappoint. that could really play out and hit the broader markets. we've been keeping our eye on dollar-yen, fast approaching the 150 level. some of this has to do with the other side of the trade war. greenback slumping. also a regular meeting between the boj governor and the prime

minister. in which they did not talk about rising yields. sounds like a green light for further rate hikes. higher yields. yen stronger. this chart shows you the flattening of the yield curve. that also points to how dollar-yen's path looks to be downward lower. tom: ok. thank you very much indeed. fed minutes right now showing officials expressing readiness to hold u.s. rates steady until they see more progress on inflation. the federal reserve vice chair says strong economy allows policymakers to take their time. >> cumulative cut in the policy rate of 100 basis points last year has brought the stance of monetary policy closer to a neutral setting. monetary policy continues to be restrictive. i believe that with a strong economy and a solid labor market, we can take our time to

assess the incoming data to make any further adjustments in our policy rate. tom: valerie tytel joining me now for the analysis. what stood out to me was less that this is a federal reserve that's comfortable being on hold for now and more that they discussed whether or not to pause or sideline quantitative tightening. what stood out for you? valerie: yeah. that's right. the devil was in the details. reports on the radio -- rate outlook. the fed is likely to be on an extended pause until we see more progress on inflation. the interesting part came with their discussion of quantitative tightening. there was a discussion around the concerns around the debt ceiling slow down, possibly meaning that they need to slow or perhaps pause quantitative tightening. that could be the first hand that the fed is may be concerned about the low level of reserves in the financial system. this one is want to watch. treasuries rallied a bit on this as well. equities also liked that hand

about a pause the quantitative tightening. conversely, i want to talk about how the european bond market closed. in juxtaposition to how treasuries traded strongly, we did see a fourth day of weakness in european government bonds. taking the german 10 year yield over the last four sessions higher by nearly 13 basis points. this is around the for -- story of further debt issuance to come. it was a week session for european equities. that rally has taken 2025 by storm. finally seeing some profit taking. euro stoxx 50 index had its worst day since december. down 1.3% in yesterday's trade. tom: the impact on the bond market in europe and the profit-taking across european equities. valerie tytel breaking down the market moves with the overlay of those fed minutes. here's what else we will be think about. 1:30, this ties into fed considerations. we get u.s. initial jobless claims as the labor market still

shows that resilience that has been evidence of some cracks in the labor market in the u.s.. that data will be important. at 2:30, u.k. time, you have the specificity, we will be hearing for the fed as well. we will see if the consensus continues around the comfortable nature of this federal reserve staying on hold for now until they see more progress on inflation. 3:00 p.m. u.k. time, euro area consumer confidence. a gauge on the health of the consumer in the u.s.. you can get around above the stories you need to know to get your day going in today's edition of daybreak. terminal subscribers can go to the terminal. coming up, president trump denounces ukraine's lot in your zelenskyy as a dictator. saying unless a deal with russia is reached, he won't have a country left. we bring you the latest on the growing tensions between the u.s. and ukraine. that's next. this is bloomberg. ♪

tom: welcome back. president trump has stepped up his attacks on ukraine's leader after earlier labeling flooding or dictator. he pressures kyiv to accept a deal to end the war. trump speaking at a saudi run invest in summit in miami. he took new aim at the ukrainian president. >> i love ukraine but zelenskyy has done a terrible job. his country is shattered. millions and millions of people have unnecessarily died. you can't bring a war to an end if you don't talk to both sides. you have to talk. they haven't been talking for three years. we hope to see a cease fire soon and to reestablish the validity in europe and the middle east.

tom: ok. let's bring in tony halpin. this doesn't seem like it's going to end particularly well. the tension is clearly there between these two leaders now. tony: yes. that's right. after this week's talks in saudi arabia and the phone call between president trump and russia's president putin, ukrainian and european leaders were already pretty gloomy about the prospects for relations with the u.s.. even trying to reach a deal to end the war. this comes close to something like a breach between the u.s. and ukraine now which relies on the u.s. as its biggest military and financial ally in resisting the russian invasion. it was really striking, that president trump outlined how zelenskyy had done such a terrible job and the country had been shattered and so many people had died. but he did not all appear to draw the conclusion from that

which is to identify the person responsible for causing all this death and destruction which was russia's president vladimir started the war. certainly in the kremlin, they will be delighted by this turn of events. russian state television is already very pleased and clearly believes that the u.s. under president trump now is taking much more their perspective on this more. quite hopeful that terms will be favorable to russia when some kind of deal is proposed. tom: yeah. we've heard european leaders trying to push back on a trump that is now mirroring the talking points of the kremlin on this conflict. how much support can ukraine expect to get from europe? can they reply up -- rely on european support? tony: yes. european leaders are very much on the spot now. it's down to them whether ukraine will get continued support if the u.s. begins to pull away to try to pressure zelenskyy to agreeing to a deal. the u.k. and france are putting

together what's being called a reassurance force. in itself, doesn't sound very reassuring. the idea it seems to be is that there will be something like 30,000 european troops who would help to protect ukrainian cities and critical infrastructure like ports. but crucially, they would not be deployed along the front-line areas in eastern ukraine. that's 1000 kilometers. 600 mile front-line. under any peace agreement, somebody would have to police that. estimates have put something like 100,000 troops that will be required to do that. already, many european countries are saying that they won't be ready to commit troops to the ground and ukraine to help any such effort. much of it will depend on u.s. support. the british prime minister is going to washington next week to try to sell this idea to president trump. russia has said it's against european troops and ukraine. on current form, you would imagine trump might be willing

to listen to the russian argument. tom: which is a pretty terrifying thought for those sitting in kyiv no doubt. thank you very much indeed with that important update. u.s. russia talks continue to decide the future of ukraine. south africa is hosting the continents first g20 foreign minister summit. however, marco rubio not be in johannesburg, citing an agenda that includes climate change and d.e.i. for more, let's go to johannesburg. what can we expect then from the g20 agenda over the next couple days? how much of a blow is it that the u.s. secretary of state is not going to be there? jennifer: yeah. good to be with you. it's quite a blow for south africa. especially if you consider this is the first time we are seeing an african country hosting the g20 presidency and the country is meant to pass off the presidency to the u.s. next year. still, we are hearing from south african officials saying that

they are expecting this to be a fruitful first meeting. focused on what the theme is this year which is solidarity, equality, sustainability. the interesting point here is that we have seen a lot of the g20 cohesion between these members really eroding over the past few years when you look at a lot of the geopolitical disputes that we've seen globally. at least for president ramaphosa, he's helping to at least try to strengthen multilateralism and strength in of the partnerships. not just for south africa, also for the african union. the global south as he says it. also try to focus in on their developmental agenda and focus then in on what this looks like going forward, especially if you consider some of the reversals that we've seen from the trump administration. not having marco rubio there in his new role of secretary of state potentially sets up other

countries then to step in and take a stronger approach and a stronger relationship with a lot of the countries that make up the g20 here. so we will see where these conversations go and whether or not trump and rest of the u.s. ga actually get on board with the g20 as the year progresses. tom: yeah. for marco rubio and the trumpet ministration, equality is now a dirty word. jennifer zabasajja on the ground for us in johannesburg at the g20. thank you for that update. africa's rocky relationship with the u.s. under president trump is the topic of the first episode of our new monthly show next africa. you can catch that on friday february 28 at 5:30 p.m. london time. coming up, they don't make sense. canada's international trade minister gives us a frank assessment of president trump's proposed tariffs. we bring you our conversation

with mary ng. that's coming up next. this is bloomberg. ♪

(♪♪) ♪ three little birds ♪ ♪ (steel drums playing lightly) ♪ (♪♪) (♪♪) (♪♪) (♪♪) (♪♪) (♪♪)

>> it's possible. we did a great trade deal with china. we did a great for the farmers, the manufacturers. $50 billion worth of our product. the problem is that biden didn't push them to a to it. -- it here to it. tom: president trump saying a new trade deal with china is possible to get canada's trade minister says donald trump tariffs only make goods more expensive for americans. mary ng reiterated a vow to retaliate if america goes forward with import duties. >> we've been very clear. tariffs are expensive for america.

they make no sense. when 70% of what i export into the united states, the united states takes and adds value to it and it helps them be more competitive with their products. adding a tariff simply makes it more expensive for americans. adding tariffs to canadian exports simply means that it was going to cost americans more. it will cost americans more at the pumps. it makes no sense. we will continue to reiterate that message. we've been very clear, we don't want to be here. we don't want to initiate anything. should there be punishing tariffs on canada, we will respond accordingly. in the meantime, we are having conversations with the americans as we do when you have a trading partner like the one between canada and the united states where canada, it's our largest trading partner. we are important to the americans as well. when i count 36 american states as my top customers, i sell more to them than china, japan, the

united kingdom, and france combined. so we need to work on this together. >> that 30 day pause. how confident are you that that can be extended? >> we are working very hard on that myself, the prime minister, my cabinet colleagues. this is a really intentional effort to work through the administration. one of the things that the american administration have raised concerns about is how we can collaborate and do more on border to make sure that at the border, we are indeed working more together. despite canada only having less than 1% of fentanyl going into the american -- into america. it's just as a concern for canadians. collaborating together to make sure that we are doing more on our border is what we are doing. and we are confident that that work is not only making progress but we are doing that with the americans. this is the testament of the

canadian-american relationship as well. the ability to talk through and work through what are sometimes really tough issues. we are committed to doing that on our end. tom: canadian minister of export promotion, international trade, and economic development speaking to bloomberg's haslinda amin. there's plenty more coming up. we will do more analysis on the german elections. we speak to the ceo of one of germany's most well-funded startups to talk about what the text seen here in germany needs from the next government. stay with us. this is bloomberg. ♪

>> good morning, i'm tom

mackenzie, happy thursday. trump says trade with china is possible. stocks in asia drift lower weighing on risk sentiment. trump says zelenskyy is doing a terrible time. cost cuts, germans boost profitability and european stocks fell. futures looking slightly higher,

european futures gained 9/10 of 1%. let's flip the board. there is caution discussing postponing tightening. the euro is up versus the greenback. bitcoin is close to 97,000. gold pushes through record highs. schneider electric full-year adjusted eps coming in with full

year adjusted eps, 8.30 above estimates, increasing to three euros above the estimates and i'm joined by the ceo olivia bl uh. in an environment of geopolitical tension what are rates like? >> results have been very good, as you rightly say digitalization is important and

very encouraging for the future. tom: you've been in -- in -- in -- in the job for less than six months so what are your priorities? >> i've been in the job for six months but also 32 years in the company so we developed technology to make energy efficient and another priority is to accelerate by 2027 and i believe our job is to accelerate the transformation.

tom: north americer has growth well above the aipac region. will that continue? >> absolutely, you know that but we are in the north america, we've seen acceleration not only in the positioning continuing 25 and beyond. tom: another key question, you've seen the double digit growth in the dater center business. have you had customers say we need to spend less?

>> the best way to answer is with our pipeline over the next two years so no, there is no reduction. the consumption of a i increase. it is a confirmation that we saw real confirmation but beyond two or three years it's difficult to say. we are getting ready, you are seeing our guidance, we are

ready to make sure we deliver profitability with our guidance. what we say is we balance to protect our prosperity. tom: we had automotive earnings and there is a slowdown for ev's, is there a slowdown in demand? >> this demand came on top of everything else that we are doing and huge exposure, charging is just a fraction and definitely a bit more normal.

tom: on taxes lvmh is different but another french conglomerate is facing 700 billion euros, what is the result of higher taxes? >> we are not impacted so no major impact. tom: there is no -- there is no tax impact? >> nothing compared to what we have today already. tom: ok. olivia, thank you and we appreciate your time. dater center and strong growth in north america.

two alibaba -- to alibaba, they are due to report earnings. $110 billion will be added to the market value. let's go to annabelle droulers. >> i think chief among them will be how it is alibaba capitalizing on -- on deepseek and optimism in china ai names because you mentioned the rally, that's the sales of alibabber. you had a big rally and domestic concerns, a company making 90%

of revenue from china in -- in -- in consumers. how are they managing to get our allies? we are expecting revenue to increase to 9% from 7%, watching for how can alibaba fend off the competition when you've had baidu and tencent integrating, alibaba technology is standardized, how do you stand out? tom: it performs well but it's another to get return on investment and analysts are getting cold feet.

saying take some profit. annabelle: yeah, uh, you're -- you're looking at a stock that has risen in february so it's been a short and sharp rally, huge market value, you -- you -- you -- you -- you are trading above the price target which is unusual so some say take profit. jd morgan says trim exposure to china ai proxies like alibaba, alibaba health, tencent, tactical plays like china property. they are optimistic on ai, pointing to a big test for china tech names, can they -- can they

stand up to expectations? high bars that -- that they have to attain. mark greenfield said alibaba is asia's nvidia story and that's how prominent they will be for the broader outlook. tom: quite the comparison, annabelle droulers. excellent preview of alibaba earnings. to the mining space where rio tinto closed lower after annual profit missed estimates, underlying profit was lower and growth in copper offset prices. rivals reported slumping demand out of china and airbus struck a

gorgeous note, the plane maker is targeting 820 handovers, an increase from last yeah. trade tensions and ailing space business cloud of the outlook. we will speak to the airbus cfo at 10:40 a.m.. german tech leaders call for bold reforms from whoever wins sunday's election, one of the best funded tech companies next, stay with us, this is bloomberg.

tom: ... welcome back to bloomberg daybreak: europe. happy thursday. it is 745 a.m. in -- in germany. german leaders warned that there will be reforms, investing in ai adoption and incentivizing workers to move to germany. joining me is the ceo of get your guide, backed by softbank,

kkr, some significant names 800 employees. let's talk about what the government's to do to build a tech sector, what should be the priorities? >> it such a beautiful day in berlin. this is a pivotal moment, we have lacked competitiveness and now it's time to change that, and innovation needs to be at the agenda. you might know the pension system is a pay in, payout system in the government has to subsidize it, we need to move to a capital based system investing

in stock listed companies. tom: is this about -- is this about long-term growth capital? >> in germany ipos are backed by american funds, not german funds. that is causing a gap of tony times -- 20 times in an even bigger gaffe for public companies and that is something we need to change, how are pension system works and how you invest. tom: do you -- do you get a sense that they are listening? >> the -- the big issue is there

going against constituents, you can't migrate without anyone taking a cut is the core issue. tom: what -- what -- what is the scale? >> if you look at capital it has a 20 x gaffe, one 58, $170 billion invested versus 7 billion in germany and 50 across the european union, 500 billion people in europe have one third of the venture capital of the u.s.. tom: and -- and venture capitalists say you can write your of -- europe off but are we -- are we missing something? >> so i think contrary to

american opinion the eu is good, i'm a huge fan of the single market and the policy proposals make it easy for european, uh, uh, companies to scale. there are two great pieces of legislation and we need a level playing field. if we don't we will not have growth. tom: jd -- jd -- jd vance says there will be -- there will be -- there will be measures -- countermeasures, they will -- they will hit back. >> if you want innovation and growth you need a level playing field in jd vance has a nuanced

opinion if you look at what he said, but in europe we need to have backbone. tom: there is a question about whether the rise of the far afd has damaged germany's brand and made the country less attractive if you're looking to relocate, is that a concern? >> attracting foreign, uh, talent blocks growth and innovation so we need a highly skilled migrants in germany and -- and -- and in our economy. if you look at, uh, you know, the last couple of years we have not had enough of them. 85% are foreigners and we hired the cto from netflix last year,

it took him six months to get a consulate appointment, that's how hard we make it. we need to digitize and make it more attractive, lower taxes. none of that is policy of afd, that is not the solution and we need to attract global talent. tom: and -- and others say you can take the middle stand. digital products create efficiencies and revitalize the base. >> absolutely, we sit on a treasure trove of data, we need to leverage it but we don't do

that if we don't do that with proprietary technology. tom: you've touched, does -- does get your guide list in -- in europe? >> so we are doing incredibly well, tourism is booming since the pandemic. five or six times the size so we have no rush. tom: thank you for insights into what the government needs to do to close the innovation gap. will radio -- we will bring you a special program on february 23 live from the german capital in berlin. stay with us, this is bloomberg.

>> the fed is cartious -- cautious given the tightness of the market, but the key was around tightening, whether to pours -- to pause stood out to me. tariffs were discussed. how fomc members are thinking

vs. the labor market, the yellow line is unemployment and concern has dipped. 15 of the fomc see risk of inflation. markets expect 1 or 2 cuts. yen past 1.50 for the first time since decmeber and hikes a -- december and hikes are possible. 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.

anna: i'm anner edwards --