manoa my call to make sense of it all i'm joined by van ohio he is the president of the european investment bank. we just heard the speech of a mano a mano call a very energetic appearance here by the by the french president what do you make of his appearance here i'm still more than impressed i know him and i call him from from a time long long before he was a minister and i must say the way he developed over a month from all of a sudden the french leader then a flick of a month the european leader and now he has brought himself in the position of the global leader it's amazing and it's very very encouraging for europe all in all this was a very good day for europe anyway we saw him on american all saying francis back he wanted to promote business obviously but he also wanted europe to move forward with a set of reforms which one was the most striking to you both i mean the announcement from his back was very credible but at the same time he could have said also europe is back because i go back to the last ten or so of devils meetings where the rest of the world looked a little bit of the sympa

speech our correspondent in davos just of corba caught up with vanna horia president of the european investment bank and asked him for his reaction. i'm still more than impressed i know him and i call him from former times long long before he was a minister and i must say the way he developed over a month from all of a sudden the french leader then after a couple of months the european leader and now he has brought himself in the position of the global leader it's amazing and it's very very encouraging for europe all in all this was a very good day for europe anyway we saw amount of my call saying francis back he wanted to promote business obviously but he also wanted europe to move forward with a set of reforms which one was the most striking to you both i mean the announcement from his back was very credible but at the same time he could have said also europe is back because i go back to the last ten or so davos meetings where the rest of the world looks a little bit of the sympathy on those poor europeans because they couldn't get their act together and this is the first time that we are here in

the ceo of mueller maersk will join us later on as well as president of the european investment bank.ll wrap up with the ceo of russof tomorrow you'll be joined live tomorrow when you have this panel. >> we have the panel lined up. we have the uk chancellor on the panel, larry fink will be up there. we have christine lagarde and steve mnuchin who has made a splash as he arrived talking about the prospects of the trump administration going forward all of these people will be on the panel that will happen around 11:00 tomorrow. >> earlier today you had a chance to sit down with the italian prime minister, talking about the elections coming up, also questions about whether, in fact, he would form a coalition with the former leader, silvio berlusconi >> absolutely. i began by asking the prime minister about what the impact would be of a hung parliament. at the moment, as you look at the polls, that looks like the most likely outcome. italy has had a decent period in recent years coming out of the funk of the global financial crisis what would a hung parliament mean for policymaking and st

that work and has stood the test of time such as the commoning ing a ragricultu and the european investment bank among others. budgets for these in my view should be protected. europe can do new things and europeicide do new things. but new programs require new money. ireland is a founder member of the euro and the single market and we uramong the first to open our labor market. we now want to see the completion of the single markets and the digital single market and above all a single market that serves interests of all our citizens and not just corporations. so i want to commend this parliament on the work it has done to make the lives of europeans better. by removing roming charges in the european union. that helps bring people together. your recent action on credit card charges and like wise, i commend the way you've championed air passenger rights. now is the time to fulfill the promise of the single market in other areas. for example take financial services, insurance, mortgages, loans. so they can get cheaper loans and insurers if need be. i'd ask the parliament to work on this and it wou

policies that work and have withstood the test of time, such as the common agricultural and the european investment bank among others. budgets for these should be protected. europe can do things in europe should do new things. new programs require new money. ireland is a founding member of the euro and the single market. we were among the first to open our labor markets to europeans from central and eastern europe. we now want to see the completion of the single markets and a digital single market. above all, a single market that serves interests of all around citizens and not just corporations. i want to commend this parliament on the work it has done to make the lives of europeans better by removing roaming charges on mobile phones and the union. that helps bring people together. the recent action on credit card charges, and likewise i commend the weight he championed air passenger rights and your plans for inter-rail. now is the time to fulfill the promise of the single market in other areas. for example, take financial services. sourance, mortgages, loans, people can get cheaper loans from european

it was my call it cost of call by last night catching up with the president of the european investment bank in davos so what's in store for us today let's cross over to ben has a woman who joins us now from the world economic forum on the balcony certainly of our team there ben it looks very cold i know that germany and france were in focus yesterday today the focus shifts first to britain and let's say a slip of the tongue by the former british prime minister. this quite surprised me you'll remember a prime minister's raise a maze disastrous break that speech here last year i sure do and so do the davos participants here it was basically zero content no plan whatsoever a year on they do have a plan now but they've got to get their show on the roll on the road rather they've got to get things signed off by the end of the year old well before the end of the year which is probably a reason why the reason may is trying to deflect any criticism and shift the focus has been parts of her speech leaked overnight suggesting that she may really point the finger at take companies here and they have p

by thee: we are joined former prime minister of italy, and the vice president european investment bankntlemen for joining us on this cold but nice day in davos. is this a little bit of european growth would look like? are we did get a deal on brexit? here in switzerland we are not exactly the european union. you are confident about brexit? thing is the overall european economic situation. if you want to point to specific we maylike brexit, discuss them. i am not confident on brexit. i think it was not exactly a smart move. i have to be competent on italy. and i am even confident that the italian elections are not going to be is disruptive as we might have thought six months ago. francine: on brexit, do you believe they will reach an agreement on financial services? >> usually the nature of negotiations eu find a last-minute deal at some stage, and then everyone will be disappointed. the solution is always suboptimal. the difficult the for the u.k. is to understand that when you join the european union you do not join on your own terms but on that eu terms. when you leave the union, the

banks, and we look at the valuations with investment banks, u.s. banks versus european banks.ards at jp morgan asset management, what do you think ?bout the bank sector as we showed earlier, banks are doing well so far. second only to the auto industry as talk performers in european stocks. is it a good investment for 2018? mark: there are three main aspects we look at the financial spec -- financial sector. the inflation outlook, the verage in the system, and how you cope within relation. what tends to happen is provisions come down. more inflation helps the sector because it is dealing with leverage and allows people with debts to pay off the debt more readily. we have seen the flattening of the yield curve, but what is more important for the banks is the maturity of their loans and the maturity of their financing. it is a three-month to two-year curve. that is been different in the last six to 12 months. the more important one is the steepening at the short front end of the curve. in europe, i wonder if this is where i will get my performance. everybody who sits in the chai

coming up, algebris investments from davos. talking european bankstcoin, and more asset classes. this is bloomberg. ♪ mark: i am mark barton. vonnie: i am vonnie quinn. this is "bloomberg markets." it is time for the stock of the hour. caterpillar is losing four percentage points of gains. .t is lower by 2% this appears to be a bright outlook for 2018, the company rejecting growth in the mining equipment business before any potential u.s. infrastructure bids. joining us is taylor riggs. every: pretty much analyst had a bullish outlook. we will find out more details at 11:00. look at the fundamentals. that is something that we can hang our hat on for now. 9281,r terminal, g #btv they are looking at 30% retail sales. it is pretty good. they talked about how this is demand in the u.s. before any potential infrastructure plan that we will may be here about next week. construction business is 40% of the revenue. it is pretty good even before potential u.s. tax reform. you have another chart to pull up for me, we're looking at sales by region. we talked ab

francine: will 2018 be the year we say european banks are losing out to u.s. banks? it seems the investmentn the u.s. are eating our lunch. >> i am positive. i do not believe in a world were investment banking is concentrated in five u.s. banks. the amount of risk in the system would mean over concentration. clients do not want that either. it is a world where in each region, five or six big players, and they will connect so that companies can have between 10 and 15 core banks so that large investment firms can have 10 providers of services, liquidity, etc.. i am optimistic in the long-term. it might take some some time. go,cine: how did mifid ii and how is brexit going? worried, it did not happen at all. with the introduction of the new regulation, brexit same thing. about the divorce settlement. i would say negotiations are around the new relationship. in 2018 it will have less impact. francine: are you moving anything elsewhere? >> we have a presence on both sides of the channel. systems,eople building a relationship with the regulators. , if weess significant have to choose another coun

that, it's expected that a franco—chinese investment fund worth around $1.2 billion will be announced. with me is gilles moec, chief european economist at banka merrill lynch. nice to see you. what do you think will be the key headlines coming out of this trip between these two leaders? some sort of convergence on the need to maintain globalisation. emmanuel macron was elected on the champion of globalisation. he said he is the free trade, but he is not for na ivete. free trade, but he is not for naivete. he will try to balance the tone and try to send the message that france is open for business and wa nt to that france is open for business and want to sell more to china, is happy about chinese companies coming to france but he wants to maintain control over interest and and compensation, also wants china to use their own rules on foreign investment. how far will they get without particular issue, the foreign investment rules? that is what many countries and companies want to see. at the moment, there is probably nothing to concrete that will come out because there is a european process at the moment. france has actually tried to convince i

thank the european central bank and such bonn certain projects which wouldn't be feasible for businesses to invest in. what is a says it did in the abbas diesel supporting? okay. never said it was to the wall and i'm you like me to. fiji because as you know in lebanon we have one and a half million refugees which is a lot to handle. we need economic growth. is that's the only way we can really be able to take in those one and a half million refugees. walkable up but usual. it's a bird in lebanon can't keep carrying. the idea of a political solution in syria. i don't see it happening soon. so lebanon is doing a public service for the entire worl. by allowing those one and a half million refugees into our country. and i think the international community has a responsibility to lebanon as well as to jordan. motive all components of the news. the the full senate usual virtually france has always played a unifying role. worker the because you know my call add the. the man yeah guys mikey i think president mackerel has a wa. charisma that is very effective at introducing dialogue in these countries. yel

financials are eating the lunch of europeans when it comes to the investment bank side of things. >> ink there are several structural differences. one is regulation. it is commonly accepted that the less.s. banks have stringent regulation than some of the european players. the second is in terms of size and reach in the eurozone itself. you have big banks, but many of them are seen as regional banks. i think many of the european banks are still in the legacy of the eurozone crisis. to delever operationally. mark: simon, ana botin highlighted the steepening yield curve plus the bank, but she said we have to be aware of the t, easing to to q tightening. market participants seem to be taking it in stride. is there a risk in this approach? >> there is a risk, but probably not from a structural standpoint. there's still a very good underpin for less risky assets, government assets, even if the central banks are leaving the playing field. how is more interesting is the structure of the bond market has changed in the last decade to the point where you have very procyclical price action. what

investment bank. guy: next, the car sector. european auto stocks are leading the gains into 2018, about that next.♪ ♪ we are 30 minutes and tear trading day. let's give you the top headlines. samsung slides, the strong won hits harding q4. is 2018 shaping up to be a tougher year? altice splits. patrick drahi is to break the company into two to give its u.s. operations protection from its parent debt woes. shares opened sharply higher end of the debt drives higher, as well, dropping the yield like a rock. europe's auto sector and accelerates into the new year, gaining 6% in five days across the board. if you look at it one by one, fiat chrysler jumped more than 20% in the first week of the year. is 2018 going to be the year the sector regains traction. good morning and welcome to the bloomberg markets. i'm matt miller in berlin alongside guy johnson at bloomberg's european headquarters in london. let's take a look at how stocks are faring so far. guy: bad news and good news. good news if you are freddie lait because telcos are doing well, up .6%. basic resources leading. headline, every morning so

john: is there a chance of a european champion emerging out of that? investment banking at the moment feels particularly led by the americans. is there a possibility that something could court made in europe? james: i think it is unlikely, honestly. there are strong investment bankers in europe today. number of with a them, and a lot of them respect those institutions, but i do not think the regulators will be anxious to see those institutions merged to make larger balance sheets. i do not think it is probable. john: another thing you talked about is automation. do you think in wealth management and investment banking you are relatively safe from that? which way do you see that going? james: to the core question of automation, i was asked about how much i focused on competitors, and i said obviously, you are in the same industry and have some focused, but it is not what we get out of bed worrying about. i said i worry about ai, automation, cyber risk, digital -- all of these new technologies that are coming to the market at the same time are transforming the way business

european union prepares to delist. bitcoin takes another bashing cryptocurrency continues to fold in value over regulation fears and. what happens when a german bank advises customers to invest their mistakes in global shipping and trade volumes suddenly plummet. i mean physical and let's do business tax havens a top of the e.u.'s agenda today but the bloc isn't writing up a list of havens it did that last month this month it's with laying down the list activists a shocked e.u. authorities argue this is progress at its best i'll explain seventeen countries were named and shamed on the list published back in december many of them was smaller islands in the caribbean in the pacific officials now expect remove eight of those countries next week after they've made new commitments to reform they include south korea one of the world's largest economies the united arab emirates one of the largest arab economies and panama long a haven for offshore accounts so is this a breakthrough or is europe's campaign against tax havens breaking apart max haywood joins us now from transparency international in our brussels bureau good to see there max could you explain to me first of all what t

investment banks. they can afford to service all sorts of clients around the world. in the middle you have some smaller mid-sized banks, europeananks they may find it harder. strangely enough, when you get down to the bottom tier of the market, you can specialize better and mifid ii might help that the squeezed middle as they call it you can't be everything to everybody, so where do you focus? which bits do you say, you know what we don't make an awful lot of money here >> phillip, thank you very much for shedding light on that >>> still ahead, back to work for congress they return to washington today. we'll tell you what is on the agenda there as we head to break, the national weather forecast from bill karins. >>> good wednesday morning to you. a lot going on with our huge ocean storm. this is primarily an event for coastal areas of the east coast. we're already watching ice storm underway winter storm warnings through the coastal carolinas, energy and even north florida the amount of ice, never seen this before in north florida this is a quarter inch of ice. that's a half inch of ice. this pink could be the possibility of th

investment to deal with that. absolutely if we leave the european union, the need to improve our productivity becomes absolutely critical and urgent. manus: that comes through from one of the banks. banks are responsible in part. is that a reasonable? ate: encouraging investment the moment in the u.k., we go from one of the fastest-growing to one of the slowest growing, that is a reaction to uncertainty, inflation, political uncertainty. the sooner we can deal with that the better. thank you so much for joining us. mike rake, chairman, worldpay. for this do it program. the european open is next. we will talk to jim o'neill later. this is bloomberg. ♪ ♪ tuesday morning, good morning. welcome to bloomberg markets the european open. i'm guy johnson alongside matt miller. castrate less than 30 minutes away. trade less than 30 minutes away. we have conflicting commodities above $70rude closes a barrel for the first time in three years. barclays warns iron ore could collapse to $50 a ton. what are the implications for global inflation? asia marches

united states reimposes sangs on oil exports and iran central bank, it really does collapse the deal because any european company thinking of investingiran or conducting trade with iran is going to stay away out of fear they will suddenly find themselves at odds with the u.s. treasury department. so it really is a death blow to the deal. i think a lot of people are wondering whether, if 120 days from now, we see some progress toward getting new legislation on capitol hill and perhaps the europeans saying, look, we're not going to renegotiate the deal right now, but we're standing with you in an effort to perhaps think about doing a follow-on agreement after this deal expires or enhance sanctions against iran on its ballistic missile program that perhaps they could once again sell the president on staying his hand. that's a highly uncertain scenario but i think it's what the deal's defenders are now resting their hopes on. >> yang: 120 days to go, mark landler of the "new york times," thank you so much for helping us understand this. >> thanks for having me. >> woodruff: stay with us. coming up on the newshour: mark shields and david

jes: we're making investments to be prepared to use our irish subsidiary to re-domicile our european branches as branches of that bankare repaired so that matter what happens with brexit, we will be able to continue to prosecute our business a crop -- across europe. francine: what is the one question that you would like theresa may to answer? is fore important thing the premised are to stay focused on the u.k. and what is right for the people of the u.k. so i would not dare it -- it dare ask a question for barclays. she has a big challenge and she has shown rate capacity to deal with a lot of the issues. this could be an interesting moment given what we are seeing toterms of the u.s. approach globalization. that could be an incentive to push the u.k. and europe that closer together. if you look at the comments that came out of macron, there is ample field for the u.k. and the european union to re-embrace the values of free trade and the values of globalization. in a backhanded way, this has brought u.k. and europe closer and the premised are recognizes that. are three weeks into one of the biggest changes in the envi

the bank of korea raise rates in november for the first time since 2011. the biggest change in european investmentustry rules in a decade take affect on wednesday as regulators seek to prevent another financial crisis by boosting transparency and shedding conflict of interests. a broad range of asset classes and products, including cash and derivative instruments, commodities as well is fixed income. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. ramy: thank you very much. two of asia's biggest economies finished 2017 on a strong note, as chinese manufacturing shrugged off the initial campaigns against debt and pollution. while korean exports hit a 60 year high. our policy editor kathleen hays has the numbers. let's start with china. can beijing maintain this momentum? kathleen: part of the question is how aggressively the chinese government can pursue these big policy changes like pollution and bringing down the inflated chinese debt. for now, 2017 and 2018 look good. let's go to the chart because we want to look at the

bank and health care stocks. some decline this morning. dow futures down 39. cheryl: keeping an eye on the 10 year treasury up to .5%. lauren: check out european investment. stocks open lower on inflation worries in the bond market. cheryl: lower in japan and south korea. lauren: a very kodak moment creating new business plan that has nothing to do with cameras. "fbn:am" starts right now. train 25:01 a.m. in new york and went taken at january 10th. i'm cheryl casone appeared lauren: and lauren simonetti. thank you for joining us. cheryl: an entire meeting on the white house and television. i don't think we've ever seen that before. lauren: that is her breaking news overnight. temporarily halting president trump's decision to an daca, trying to give a lifeline to dreamers when the state of california and other plaintiffs asked the judge to block the trump administration from rolling back the odometer program other lawsuits play out in court from the justice department did issue a statement saying today's router doesn't change the department of justice position on the facts. daca was implemented unilaterally after congress declined to extend these benefits

european close on "bloomberg markets." mark: here are the stories we are covering. the bank of japan signals the age of using money isn't over yet. stocks higher today. the debate between active and passive investing best in the long run? we have an exquisite interview with dick weil. live from davos, we will hear from the canadian finance minister. what he expects from the latest rounds of nafta talks in montreal. check out what's happening to european stocks. as you can see, there's a sea of green on our wonderful screen today. equities, currencies, bonds,

european banks are going to have to merge to stay relevant on a corporate and institutional side. this is a question that matters to you, what do you say? james: if you take my business -- business, investment bankingd capital markets which i think he is referring to, we have leaving positions globally and in the united states and a lot of area. although we do not have the full scale and the balance sheet of the u.s. banks, we have been effectively competing. maybe some of the others have not had as easy a go but we have been very competitive. erik: in the post crisis time, credit suisse and a number of i do notller banks, mean small but relative to a jpmorgan, you are smaller, have had the focus on certain markets . you specialize in certain areas where you want to remain relevant to your clients. are you thinking that maybe, with the perfect environment we are in, all signals go green light, perhaps it is time to reclaim some of the territory you gave up? james: a good question. we focus on where we have competitive advantages. we believe that an area we are not present in or where we could scale up, where we could do that and still earn a return, we would go ahead and do that. erik: what are you

over investment banks at the moment rising rates will give them those kicker as margins improve and positioning is actually better for banks >> do you draw a distinction between u.s. and europeanbanks at this sector and why >> we do, we believe that the europe is lagging at the moment. but more opportunities in the european banks than the u.s. we still like the u.s. financials but we prefer the european financials. more generally, we like value own growth in this stage as well >> can you tell us about specific names you're looking at in the european sectors? >> the bank sector, ing and pnpb >> money is still cheap. which sectors do you expect to see consolidation? >> i think it's very much spread across the market. there are opportunities. we saw an opportunistic bid for the uk i think you're liking to see look for underperforming companies in general but from a secular point of view, in the long run, european banks again could see some sort of consolidation if we see the political moves we've seening from germany and france come to fruition >> do you think that opens up the sector to more conciliation then >> it's a very, very long-term thing, that kind of conciliation the fa

jes: we are making investments in dublin to be prepared to use to irish subsidiary redomiciling our european branches as branches of that bankuing to be prepared so that no matter what happens with brexit, we will be able to prosecute our business across europe tomorrow as we do today. francine: that was the barclays chief executive officer jes staley speaking to erik and i. we talked about some of the ongoing investigations by the doj and the sca. francine: it tom: -- it will be amazing, the next 12 months for barclays. it is a unique banking story. francine: you could say jes staley has had a tough time, to say the least. let's check in on your market. anna: european equity markets keeping their head above water, waiting for trump and his administration to hold forth on the subject of america first, and how that squares with globalization. markets looking for clues. we continue to trade around the dollar story. comments from steven mnuchin, the treasury secretary, he expanded today saying that he thinks the president trump shares his relaxed view on the dollar. the dollar down as a result for the fourth day. 1/10 of a perc

invested directly into the ride-hailing service. it triggered a slate of government reforms that eliminated rights held by telling -- found holder -- the found holder and others. now to the european central bank forward their analysts of when the central bank will for theend date bond buying program. the first change in forward guidance is for seen for march. we are back with themos fiotakis . i think i have a euro trade wage chart if we can bring that up on stage. i don't know if there's a difference between trade wage or the real one. where do you expect that to go depending on how markets perceive the ecb? captions think what this trade weighted chart is the euro has been undervalued. part of the reason is the -- of the ecb. european bonds are the most expensive in the world among the major countries. european yields are way too low and as the ecb exits, this should correct the fair value. mind, they will still be buying bonds for the majority of this year and absorbing more of the supply of german bonds. even if they tweak forward guidance, they will be making very sure they imprint on the market's minds that this will happen a lot later after they stop purchasing bonds, potentially in 20

european curve we already got one what does that mean? >> it means that there's more demand for intermediate investments than -- >> but how do we get -- >> is this time different because of central banksround the globe? >> 40 basis points in germany. >> i agree >> it's weird. >> i'm speaking about our yield curve, not the german yield curve. >> i think ours is because of that, right? we look so much more attractive. >> i think our flows at blackrock are evident of the type of demand we're witnessing. we've seen so many clients stand on the sidelines, despite the flows we've had, we still see most investors underinvested, we see most investors sitting with the duration of their liabilities longer than the duration of their assets so there's a lot of -- there's quite a bit of purchasing power even at these levels that keeps the markets stable. this is why we're still quite bullish on equities at these levels this is why we think we'll see high interest rates, but not as high as people fear, and inflation is muted we don't see it this time inflation changing the two keys for inflation are dominated by are we at a point in time where wages now will start increasing dramatically? we're see

european commission presidential unplugged both said britain could still reverse its decision and strain a bloc should it have a change of heart. citigroup has reported one of the biggest losses in its history the investment bank was forced to take us to three billion euro. autonomous vehicle manufacturers present their latest creations at the detroit show. and hard tennis shoe collectors in berlin cannot wait to get their hands on added as. top. for business. here in berlin wall come to the program citi group has reported one of the biggest losses in its history the investment by was forced to take a three billion euro hit in part due to donald trump's new tax bill. to corporate tax rates causing a massive write off on tax credits left over from the financial crisis. morgan chase. billion dollars was announced.