that was the clear message from the cfo of bnp-paribas.hat, of course, celts the stage very nicely for french banks as they're the first to report for q1. next up, softchance, we'll be focusing on the key banking investments, global markets because this is a bank here in france disposed to that side of the business rather than the retail where you see bnp-paribas. that will be one go we ask for softchance. >> nancy, look forward to seeing you back in the studio as well. >> looking forward to it. >> nancy on the road there, live in paris. a lot going on within the banks today. >>> investors hopes of higher dividends preparing to fade as hsbc reported a flat capital ratio and a 14% drop in quarterly profits. despite this, earnings, though, fell less than expected thanks to a tighter grip on expenses and a better performance from the bank's trading business. get on stuff, on e-mail, as you'll, "street signs" europe @cnbc. you can tweet me directly as well, at louisa bojesen, especially if you've got any questions or comments you want to pose

lift and zon lufthansa down, bnp higher, ubs down.cture of what's happening on the market in terms of the banking sector. let's talk about china. chain's pmi -- china's pmi slipped, missing estimates. it underscores contractions and weakness in an economy weighed on by overcapacity and weak external demand. chinese policymakers are balancing the need for ongoing stimulus while seeking to avoid propping up zombie companies with excess capacity. let's bring in the chief economist at standard chartered, who joins us now from frankfurt. good to have you. is that your key concern around china, the level of debt we are seeing in the chinese business community? achievenk china will its targets this year. talking about 6.5% at -- i think they will exceed that. sector, mainly reflected in the pmi indicators, is soft, and it's going to continue to be soft, but we have to big knowledge that the chinese economy is rebalancing. if we focus entirely on manufacturing, we will get an overly dreamy picture of china. consumption is strong and services

our targer in bnp paribas is 1.16.hehi has signaled to market he does not really want to cut rates further. he is relying upon quantitative easing of the asset purchases. in that environment, if he is not going to cut rates, he will have to rely on inflation expectations rising to get the euro lower. we don't think that will happen. so, the key point is, we are very confident in our 1.16 target. caroline: what about the flip side? what about the dollar aspect to all of this? you are not buying that the new york fed president has said that two hikes are going to happen this year? >> we are definitely not expecting two rate hikes this year. our view is zero. the point we would make is the fed wants to hike. the question is, whether it has the opportunity, or the market conditions, to be able to deliver that hike. in our view, they won't get that. as far as the dollar is concerned, a key point is, what is priced in. if you look at two-year yields, we started the year at 110 baiss points. that has gone down to between 70 a

let's get back to steven saywell from bnp paribas.ou were just listening to steven healthster there. and with the repercussions if the uk leaves. if we do get more momentum, does that suggest to you that sterling is oversold at this stage? >> very much so. the way we would look at this. two points stand out clearly. firstly, the market is very short sterling. it's the largest short out there in currencies. and it's the largest sterling short since 2008. the second point i would highlight is that's pushed sterling to very undervalued levels both against the euro and against the dollar. the good easy way of looking at this, currently u.s. sterling is trading around 79 or 80. what the fair models are telling us, it should be around 70. that's a huge undervaluation at sterling. if we see a reduction in uncertainty, then the suggestion we would make at bnp paribas is that sterling could actually rally quite significantly. >> you've got it in the one hand but recent data has raised a whole lot of fear in terms of the central banks of thaila

let's leave that alone for one second, we have numbers from bnp paribas this morning. let's get the details of those. carolyn joins us with the latest on the french banking sector. >> a surprise 10% increase for the net income of bnp paribas in the first quarter. 1.8 billion euros has beaten estimates and despite the low interest rate environment and the vodafone market we have seen in the first quarter which weighed on the investment bank, that is a trend that we have seen as other u.s. banks reporting earlier this year. like deutsche bank last week, the pretax profits dropped by as much as 54%. 16 -- revenues and weak revenue in equities but somehow in bnp paribas this was upset by exceptional items that produce a positive in pass in the first quarter as well as a drop in the provisions for bad loans. these provisions fell by 28% in the first quarter. even in italy the cost of risk is down. i spoke with him and asked about the challenges of this first quarter. >> the revenues held up well but of course there was a particularly unfavorable market environment, particul

we are also getting bnp paribas 8 billion1. dollars.prised everybody with that rate cut, sending the aussi dollar downwards. 1.06.n is below that is what we have so far. iaae-m" anna: plummeting profits. it is a tough first quarter for ubs sing its top line fall while bnp paribas says that they are showing resilience but it has been a challenging quarter. >> there was a particularly unfavorable market environment at the start of the year. anna: the central bank unexpectedly cuts rates and the inflation outlook. draghi drama. the ecb

stark contrasts from duchl bank and bnp paribas as markets have rallied.ly adjusted profit before tax. and when i spoke to the ceo, he talked about the asset management business and said this is the worst quarter for equities in 18 years. the bright spot was the wealth management division. 29. swiss work of inflows which is great. but what do you do when clients with risk, you're holding huge cash balances and you're fighting negative rates. i'll tell you. you lose money. list ton what the ceo had to say. >> management is suffering. traditionally when you would see historically such a transaction of activity. clients would go into cash and a as a bank, you would make some money usually out of your deposits, right. in this environment, zero or negative rates you make no money or you lose money. and in addition to that, through the new regulations, you have used capital on requirements. so it's a double whammy. >> for that double whammy hits your capital too. we saw that in this quarter. t 1 capital coming in at 14%. expectations have been around 14.5%. i th

paribas,gainer is bnp posting a surprise increase in first-quarter profit.ne in provisions for bad loans. hsbc is lower. one of the better performing banks today. first-quarter profit rose more than estimated. stuart gulliver paring back costs. down.d commerzebank said first-quarter profits fell a greater than estimated 64%. market turbulence eroding earnings. bottom of the pile is commer zbank, 8.5% lower today. -- halflf market profit halved. you spoke to the ceo of aberdeen asset management. the shares are down by 7.4%. big, big mover today. that is after the company 6 billion pounds in outflows in 2016. emerging markets. what about the aussie dollar? after the central bank surprise. most economists by cutting interest rate to a record low 1.75%. every single major currency is rising today against the australian dollar. i'm just going to change the one day chart to year to date, just to show you what a good year the aussies had against most of its peers.yes, these currencies are rising. these currencies are falling against the aussie dollar. australians a

how nervous are the economists at bnp?s more tightening over the summer. it was also clear that financial conditions are important for the fed and data dependent. you have to have a view on how the market can tolerate pricing and a view on economics. we think it will be difficult for the fed to pull the trigger. how is the view for bnp paribas that the fed will not hike rates until 2018? that means the fed has no credibility. clear they are responding to data and conditions. if the conditions are not right, it is difficult to pull the trigger. later in the year, the data and growth will be below trend, less inflation pickup, and it will be obvious they are on hold. jon: we will talk about the feedback loop. everyone i speak to, in london as well, an equity investor, fx strategist, someone in the bond market, there is agreement the biggest feedback loop is the fx market. you agree? >> i think that is part of the third mandate the fed has. looking at global strengths and of global markets. the interrelationships. they are ta

bnp, france's biggest bank posting a surprise increase in first-quarter profits. decline in provisions for bad loans helping offset a slump in trading revenue. bmp was higher. looks like it will finish the day down by three quarters of 1%. last but not least, it almost was last, the bottom of the pile on the bloomberg banks index, the stoxx 600 bank index, 9% lower today. earlier, falling as much as 9.8%. the most since 2011. germany's second-biggest lender, first quarter profit harping market turmoil once again causing a drop in revenue. that is the bank. this is aberdeen asset management today. the scottish firm reporting a further 7.6 billion pounds of net outflows in the first three months of 2016. climbs continue to withdraw money from equities and fixed income. it has been suffering from two years of outflows including at least $13 billion in sovereign wealth assets. 7.5% lower today. just finishing with the u.k. manufacturing industry which is contracting. we had pmi data today. the red dotted line is 50. the last three years, manufacturing has not been bel

we at bnp pariba believe that we have seen strong economies developing in india and the united states. so we think the global economy will grow sufficiently in order for oil demand to increase on trend. >> gareth, thank you very much. senior strategist at bnp paribas and rob mccreery. >>> g4s shares are top of the stoxx 600 after positive quarter earnings. the security firm posted a rise in first quarter revenue and also outlined new contracts worth $450 million pounds per year. >>> let's also give you a view of easy jet shares among the top performers here in london. rbc raised the stock to outperform coming from the underperformance previously. they lifted the target by 50 pence citing the airline will move to tackle the cost inflation problems. now the report comes ahead of the first half results due tomorrow. >>> banco popolare shares are trading lower after a $1 billion cash call. popolare's ceo said he expects to see the lower cash call take place by june. >>> and shell evacuates niger delta's facility due to militants. there was also a recent bomb in there and the ceo says we c

guest,elcome our first daniel morris, senior strategist at bnp paribas. andys good to have you always good to hear your american accent when we will be leading with the u.s. because today, king dollar it ain't. we are seeing some he currencies related to minors doing well today but give us a sense that the u.s. dollar really has been the out performer. suddenly janet yellen adding to the course that is a hike to come, is it june or july? >> it is the swiftness of the change in tone. if you took it how cautious they were highlighting risks about china and seemingly in a short period of time turning it around to the next several months you may have a hike. that is the most important thing we've always seen and have strengthen the u.s. economy to justify a hike. it is surprising how quickly that has changed. >> does the economy support this change as well as some of the vocalization that we are getting from the fed? that you got is on the one hand remaining the market that u.s. interest rates are going up and make a up sooner than you think but there is alwa

again, it has been the same trend with bnp, total, and exxon.is what is saving the day for the big, integrated oil companies. guy: those are pretty variable areas of the business. you can get them right or horribly wrong. >> indeed, and that is why we are seeing shale falling farther, cost-cutting today. marketuiding the with $33 billion in spending in 2006. now, they think it will be around $30 billion. guy: so they are acting even more aggressively? >> yes, they are announcing today $30 billion. we will see what the company is a suspending in the first quarter. it seems like they are dropping to $45 billion. thatis a huge indication they are being affected by the very low oil prices. this is the first time the companies are reporting together. a few weeks ago, for shell, now gas is what really matters. guy: all the banks are telling us that trading in the first quarter was absolutely horrible, that they really struggled to make money. they called it awkward and horrible. they don't get picking up. why are the oil companies able to produce grea

ubs, 10.4% over the week; socgen, bnp 14%; paribas, down 4%, 5%. painful, painful numbers.l go to much about what's going on there, but nevertheless, harrowing is the right word. things we all knew, because they told us this would be a bad quarter. my question -- when do they get better? this q2 start to improve? q3? is in a reverse of 2015? how does it work? >> it does seem doom and gloom in europe. if you look at the earnings revisions, or at least the broker forecasts, there were downward revisions starting in the middle of last year, a very sharp move. it's been negative ever since. but if you look at last month's numbers, it started to inverse upwards. upwardsn inflection which means it is less negative. we lookthat sounds -- at the leading indicators and i was will we always look for. we are seeing a reduction of the downgrades; we are seeing a peak in npl's, even in italy. back at point to the market that has been crushed, maybe oversold, so i think that could actually -- guy: what is it going to take for people to stop wanting to transact against? >> i think we're g

steven saywell from bnp paribas. would haveknow we the security scare.tion in egypt is ongoing. the first thought is, are your passengers safe? yes.as: we have a system in place for the eurostar travelers. we check all of their luggage, we check everyone who has access to the train, passengers -- we are working closely with the authorities in the countries where we operate. yes, i would say on the egypt disappearance -- we will have to wait to see what really .appened the first few hours, it is very sad. francine: we heard from the french foreign minister it is difficult to speculate. we need to make sure we have reliable information. attacks in, the france, it has been a tough moment for france and belgium. as it impacted your passenger numbers? it has. of course, you have the effect immediately after the attacks theireople postpone travels. it rebounds quickly. in europe, they get used to the threat and make decisions. the attacks iser that a lot of people outside of europe, especially in southeast asia, are nervous to come to europe to enjoy the summe

bnp is the only one who share prices are rising today.loomberg gadfly columnist covers banks and james bevan is also with us. great to have you with us on the program. when you look at banks, it seems like all the fears we had for some of the trading revenue, ubs looking very ugly because we do not have visibility and we are concerned about volatility. >> absolutely. aside from the expectations game, you can say it was an objectively bad quarter. revenues were down, yes, it looks better because there is no more bad news on litigation, which is good news. but a sickly, it is the focus on costs, can ceo's execute? and what if they got to protect themselves of it gets worse? chase.t me cut to the i think this is a critical time for european banks. with that said, do you sense and anglo-saxon urgency on cost cutting? this is the moment where the continental banks become much more ruthless like the london banks or the new york banks? lionel: not really. it is interesting to note that all of the strategies or most of them were issued before the

bnp paribas is down by 4.3%. let's go to the markets desk. julie hyman has the latest.ie: it is looking sunnier here today than yesterday. we are not seeing a big game, but it is again. -- a gain. investors look to janet yellen and her interview later today. even if she might not talk about monetary policy, there is hopes that she will do so. taking a look at some of the movers today, we're watching google and oracle. a big jury verdict. oracle had claimed that google used some of its software as the origin of its android phone. a jury threw that out. oracle has said it will appeal this. legal experts say does not have much of a chance here. alphabet up by 1.7%. we are looking at some big earnings related gains for individual companies. we talked about the cosmetics retailer earlier, up 10% after it saw a boost in traffic. it sought increased sales. is a cloud-based software company, it is coming out with earnings that beat estimates. heelsts, falling on the of other retailers, beating estimates. thanrt is doing better department stores. they have had to overcome weakne

that is mark forman of bnp pari bas. ♪ . . scarlet: i'm scarlet fu. "what'd you miss?" investors are nervous. yields just keep going down. the yields now have a duration of about 15 years, which means of that investors have few options. this is the difference between the yield on a 30-year bond and a japanese 30-year bond. what did they call this, the widow maker trade? it is higher in the u.s. yield. alix: this no longer means anything when it comes to fx. let's take a look at chinese currency right now and what it might mean for volatility in the stock market. let's look at the terminal right now. ands look at offshore yuan onshore yuan. ast blue line shows the yuan it falls of the white line shows onshore yuan as it rises. that means the offshore yuan is becoming cheaper compared to the onshore one. onshorethat means that people o get in and devalue their currencies in order to have the matchup. in the past, there has been a risk of a stock market sellout. take a look at what happens when those diverge quite a it. you can see the composites really selloff. joe: we re

yesterday, we had bnp paribas numbers. they are coming to the downside towards the end.uced a low lot provision. today, stocks are in focus. how much will they stand apart, and how much will they stand to the same challenges we have seen in the rest of the banking sector in the first quarter? the trading environment and volumes are so weak, as we saw yesterday. how quickly can they cut costs? how quickly can the banks in this sector change their strategies to move away from the more regulated, more capital-intensive areas? course, we have blooming numbers from the u.s. banking sector as well. these i am looking at asian markets overnight. we are getting ready to start our trading day in just a few -- just under an hour. the whole sentiment is about the banks, but we had energy on the block, gold on the move, and i find it fascinating that the atlanta fed is putting june back on the cards again. you and i will have a conversation all about the dollar during our show. aporter: yeah, there is still 12% chance if you look at the function on the bloomberg. a 12% chance of a h

negative analyst calls for you to hsbc is downgrading automakers globally to underweight and x and bnpnalyst is downgrading fiat to underperform saying the company as the leasing bubble --es to an end and analysts not done enough to protect itself from a downturn following that. matt: very interesting to see fiat and general motors on the same screen. was courting mary barra in hopes they would buy his company. they did not do that and they are still not interested. david westin is in ne detroit talking with mary. still ahead, getting ahead of the barra volatility. such companies are rushing to go public before the outcome of the vote and we are live in amsterdam for more on this listing frenzy. ♪ matt: the threat of brexit is putting ipos on hold in london, amsterdam is gearing up for a listing frenzy. a slew of initial public offerings this month after a sluggish start to the year area for more we bring in celeste perri. great to talk to you on this. why are so many dutch companies going public right now? celeste: pent-up demand. at the beginning of the year there was volatility in t

italy improved for bnp. areas we talked about being the worst performing have maybe stabilized a bit. that has helped the retail side. jon: i cannot think of a single bank that is not planning deeper cuts. megan: coming up, futures and focus. this time, it is gold. -- futures in focus. this time, it is gold. ♪ matt: this is "bloomberg ." gold in the red, falling for a second day, hitting a one-year high on monday. the top traits this year, surging 21% in 2016. -- it trades this year. todd, let me ask you about gold hitting 1300 and then coming back down. is that a resistance level that has you concerned? pre-fomc. move came the dollar likewise made a big move. makeyou see commodities these knee-jerk reactions, it becomes a recovery rally. 1300 is not necessarily the top. the market is going to correct itself. old is a macro look at fed expectations. -- gold is a macro look. gold is the path you want to follow here. matt: we have adp numbers disappointing a moment ago. , we had afore that , sayingom bill

bnp is the only one whose share price is rising today. >> we had a difficult first quarter. the negative interest rate environment and nevertheless we have a strong capital ratio. a low risk profile. i think the market reaction will ease out. >> there may be a lot of factors that affect market sentiment. it's not the kind of volatility that is translating to client activity. it's a paralyzing volatility. >> they were concerned about global growth. there were concerns about the regulatory treatment of some subordinated debt. and the labor uncertainties about monetary policies. francine: it seems at all the fears we had for some of the treaty revenue was looking very ugly. you don't have visibility and were concerned about volatility? >> absolutely. you can just say it was an objectively bad quarter. revenues were down. there were no more that is on litigation which is good news. basically the focus is on cost. can they execute? and what do they have to protect themselves of it gets worse? >> let's turn did last night's surprise decision. what are your key takeaways from last

even the rural areas so bnp turnaround? but now we're in a different region. >> whitey think this point -- despite the endorsement of carly fiorina why has ted cruz band struggling. >> a huge part that donald trump is winning all the states among the republicans who have been unwilling to stand behind him i talk to you to committee chairman who endorsed him they are major players at a time when members of congress are choosing between the two but they're picking donald trump because he is quitting and also with ted cruz in the senate is a necessary but indiana but with that inevitability around donald trump with the presumptive nominee. he does have to win and the delegates but for ted cruz it is very hard to swim upstream. >> of course, it does come down to delegates you are reporting the new hampshire publican party has canceled their delicate for the committee assignments? >> number eight peas is said to do this usually but potentially it could be contested convention but what committees they are on the rules committee t

. >> we will will see if it happens, and harry from bnp pp b paribras. for your portfolio? of the aisle you are on. >> well, hillary clinton has a double-h digit lead over to the millionaire, but it a gap that is less when it comes to the millionaires, because 44% of them plan to vote for clinton in fall, and that compares to 31% for trum up. millionaires believe that hillary clinton would provide a good opportunity for investments, and only 31% for trump, but it is a 6-point spread, and the outlook is dependent on the politics much more so than the wealth levels. 82% of democrats believe hillary would be good for them compared to only 13% of republicans for a trump election. the outlook of the economy is going to be more gloomy for the republicans and 27% of republicans say that the economy will be weaker which compares to 9% for democrats. when asked who it would be better for the wealthy, millionaires say trump. of course, being endorsed by millionaires is not a big campaign boost in the populous season, but they are the biggest donor donors. 1 in 5 millionaires surveyed

going to exxon bnp which is cutting the stock which will underperform from the neutral, the company waserformed with the u.s. auto leasing bubble coming to an end. they have not done enough. bp are going through the downturn from 4%. they're going in the other direction. we're watching the telecom companies earning a quarterly growth. the european network is going through december of 2010. the organic service revenue is going up. shares are rising 2%. i want to reiterate, another meager we are watching is the lending club. some concerns are down 10% after the company was late yesterday getting a subpoena from the department of justice. it was amending the financial statement. finally, freeport copper ingold has been on the rise this morning. getting positive commentary out of jeff street. they're setting back in the s five. another analyst call this yesterday. they had a winning streak. john: if you starts to walk. central banks around the world are pumping trillion -- trillions of dollars since 2008. they have all the helicopter money. can it diverge the market group economist? , this

i think generally in terms of bnp companies, there have been about 70 bankruptcies so far.he redetermination in april and a lot of stuff going therepeople drawing down lines before the redetermination. there is plenty of distress. the main reason, everyone says why now? there was a lot of production coverage in terms of their derivative positions. .hat has really worked down i do not know how people count the stuff but less than a third of production is covered. and they do not have hedges so they have to deal with the market. there is the psychological factor. carol: you are out and about meeting with individuals. robert: there was sort of a psychological difference. it is not as if it is the end of the world if you have to file, getif you do not file and by by the skin of your teeth and selloff machinery which a lot of them are doing, what is going to happen when the prices turn up? they will get to 50 someday. what we be positioned? jonathan: are we at the point of capitulation? robert: not quite. in any bankruptcy the last thing you want to do is file when it all starts

the sharing economy has many faces from retail at rent the runway to sales that are bnp. company for the traveler who wants to try and house swap and homes with a stranger. love home swap cofounder and ceo is with me right now to tell us about it. good to see you. >> good to see you. thank you for joining us. maria: it's pretty obvious. one of go on vacation in europe. somebody once to come new york, swap homes. >> exactly. i went to holiday with my small children to a very expensive cabin in the caribbean and spent a lot of time in a dark room feeding him with the lights off because i didn't want to wake them up, without any space come without any of the home comforts at home. on the flight on the way back i watched the movie the holiday and thought that's a holiday i wish i just had. i wish i swapped my home in london to come to l.a. or new york or tribe or the world. and i was the reason i set the business. maria: that's so funny. when you're on a transatlantic flight, inspiration may strike. -- how tough was it to get the funding and all the things that go into starti

. >>> french back bnp paribas topping increase in 10% net profit.s after the banking division took a hit from the volatile environment. >> why didn't europe go up because of australia used to be when we'd get a rate cut, everybody would go up? because it's barely working. we've thrown everything in the kitchen sink at it everywhere. >> ale shapple shares, speaking consensus and some -- took a wrong turn on wait to a trillion-dollar market cap. looks like it could fall below 500 billion. the 512 falling since yesterday. last time on a losing stream was back in 1998 at the same time it had declining revenue. apple finishing lower on monday 11 out of 12 last sessions down 30% from all-time high of just under $133 a share. apple's ceo tim cook talked to jim cramer about the stock and why the tech giant is buying back shares. >> we tend to be opportunistic in buying it. so we don't have some regimented program, you know, x shares a day or whatever. opt t opportunistic to me means you buy when we believe the company is undervalued. and we believe the comp