joumanna bercetche has been speaking to the ceo of bnp paribas. and let's look at the currency markets. the dollar seems to be attracting something of a safe haven bid. dollar/yen, 1.09 the euro just above 1.24 we'll be back in two minutes some air fresheners are so overwhelming, they can... send you and your family running. introducing febreze one for fabric and air. no aerosols. no dyes. no heavy perfumes. it cleans away odors for a pure light freshness... so you can spray and stay. febreze one, breathe happy. we know life can be hectic. that's why, at xfinity, we've been working hard to simplify your experiences with us. now, with instant text and email updates, you'll always be up to date. you can easily add premium channels, so you don't miss your favorite show. and with just a single word, find all the answers you're looking for - because getting what you need should be simple, fast, and easy. download the xfinity my account app or go online today. >>> welcome back to "street signs. intesa sanpaolo reported strong earnings in the fourth quar

anna: we hear from bnp paribas's cfo. good morning, everybody. this is "bloomberg daybreak europe." we will get into the big picture story in a moment. breaking news. we are waiting for the banking sector to wake up with bnp numbers. numbers coming through. let's talk about what they have got to say this morning. they have decided to accelerate the pace of investment. fourth-quarter net interest income. that is ahead of the estimate of 6.27. they have increased their mortgage volume income. this is a bank that is very exposed to the swedish housing market, of course. the impact of the slowdown we have seen in this housing market for this business is crucial. we have seen the biggest slump since the financial crisis, even as the economy has been growing faster than average for europe. saying they see signs that pressure is easing on this housing market. headlinerucial, the coming through. manus: we are officially in a correction. falls by 2% from the high point. i said to you in the headline that the asian markets were careening to a correction. market --tion in the the hang seng down

the hedge fund is also bearish , santans on bnp paribas nder, which we talked about earlier or it --ou heard this story or read to the story. what do you think about this bet? why is he so bearish? guest: that continues to be an issue for the european economy. broadly speaking, there are two ways to think about markets. fundamentals and technicals. on the fundamentals aside, you can spend a lot of time arguing white europe is weak on a weaklly you have -- fundamentally. some of the key relation of debt they have had to the financial crisis. those are some of the ch allenges. unemployment has dropped. pmi's are at multiyear highs. inflation is starting to emerge in europe. it's still on life support by the central banks, there is an improving picture. on the technical side, this is where you look at momentum in trends and momentum's have been trending the last couple years. notwithstanding the recent think we have seen globally. it's still a good place to invest. he's going to stick around. juergen forces well bid this morning. these are the numbers. this is bloomberg. ♪ matt: we are

bnp paribas is an improving environment is likely to support growth.ing that profit will be targets. bloomberg spoke to the cfo. at the should look domestic markets in general, you see a pickup when you look at volumes and fees. we still have a low interest rate environment, so that weighs on the top line. the low interest rate environment also means that the cost of risk is lower than we thought, so overall domestic markets, the bottom line is that 5%. taylor: bnp paribas reported fourth-quarter earnings and trading results mostly in line with estimates. that is your bloomberg business flash. tom: our team all night has been working on giving you the best perspective we can on this shoe off in the market. -- shoe off in the market -- chew off in the market. robert sinche with amherst pierpont has seen this before. he joins us now. since you and i remember, libor ois out four standard deviations, we are not there now. is two the vix, here standard deviations and three where we are now. we are not anywhere near the agony of crisis. do you predict we wil

anna: we hear from bnp paribas's cfo.

. >> bnp paribas says its biggest lender is seeing an uptick despite the challenging market. >> overall look at the economic evolution, you see a pickup in demand for services. that is what you see. on top of that, we are digitizing and adapting to accompany those changes. we still have a low interest rate environment. a bit on the top line. but it also means the cost of risk is lower than what you would expect. overall, the bottom line is 5%. >> france's second largest lender has been estimates with fourth quarter -- beaten estimates with fourth quarter results. 69 million euros. it has been expected to post a loss for the period. the company also saw a surprise comeback for the equities trading business in the final three months of the year. >> fourth quarter we did better than our peers. a modest decline. when i look at the full year compared with the banks, we are doing better. our decrease is lower than the others. it seems to me, at the beginning of the year, at least when i look at the markets, we are progressing out of the extraordinary monetary policies which probably also mean

bnp paribas saying that you could have opec and shall coming -- shell coming together in terms of doing deal. the market is pricing four rate hikes for 2018. can dejaon is, are we vu -- are we in deja vu? discussed what came through on the market very shortly. the consumer is confident, so confident that he has not been since the year 2000. consumer confidence is the highest since 2000, but when they asked those participants how bullish are you on stocks in january -- the last time that we saw a drop like this in terms of the american investors attitude to stocks was march 2007. the market went on to drop another 3.5%. states% of the united actually owns american equities directly. this is a different market structurally to the your 2007 -- year 2007. those are the markets. the birds have the high ground at the moment. juliette saly holds the high ground with the first word from singapore. juliette: and the u.k. a conservative party -- conservative party lawmakers have backed an amendment calling for britain to keep close ties to the european union after it leaves the bloc. it is enough

we are back with daniel morris from bnp paribas and geoffrey yu from ubs.s significantly lower. is it just that the market dynamics are different question mark why was the selloff sharper over there? >> there was a big move in the renminbi yesterday. there are big move behind it. as we know, the constant creating in china is tension. at the same time, liquidity tends to be a bit squeezed heading into the new year. the chinese growth forecasts have been revised higher. francine: is there anything we should watch out for in the chinese market, then? or is it just more technical stuff? daniel: we are expecting the growth rate to slow, we forecast more on the services sector, rather than the domestic sector. i think the separation will be more important this year, given that we expect a slowdown in gdp, as opposed to the acceleration we saw last year. that dynamic will be important. , i: daniel morris believe it is important to get for the record, what your reaction is. exogenous shock that keeps you up at night right now? daniel: i guess we always had the risk

alix: paul mortimer of bnp paribas has my favorite quote on the spirit "the problem is the gap betweenhe monetary policy has become a sort of nannying, handholding, overprotective fairytale, and the return to the .dult real world is jarring reality and fantasy have to be reconciled." do you agree with that? darrell: i do. but whatever adjective you want on it, extraordinary in monetary stimulus. the narrative is turning quickly from monetary stimulus and a slow and gradual walk back from that to almost extraordinary fiscal stimulus domestically, right? bill, have got the tax .nd now $300 billion in a year if you annualized that over a five-year, 10-year period, you are talking about almost $1.5 trillion. david: the budget is almost as big as the tax reform deal was, and we made such a big deal about tax reform. long was a time not too ago, global synchronized growth was going to bring us out of this -- alix: like, 10 days ago. [laughter] david: exactly. i can remember that. how much of that is similar because we had more and more you start notonce seeing that leverage, the global divid

bank, theree large was a lot of speculation last year, bnp paribas, unicredit getting into the mix.holders about the possibility of a sale? stephan: let me put it this way, this conversation is a bit overhyped. yes, in a general conceptual way, it seems to be clear that europe in total is probably over .ank in germany as well the concept of consolidation is something we have to look for in a strategic dimension. if you look the moment at what it will require to be happening now, let's be honest, combining that produces even higher capital requirements than before. then you have to think the resolution board that once you to do -- you can be unzipping the new merged unit over the weekend which is not necessarily very supportive for the economy. believewhy we cross-border mergers will come, but it is a while away. matt: it is going to take some time. we hear so much about taking union in europe -- about banking union in europe. stephan: that is ecb's political agenda. there has been some progress over the last year but judging, it will take a while. matt: speaking of politics, we had

tom: i look at all of this, and the backdrop is your huge history at bnp paribas of being right on scorelook at the effervescence or du have to fold and the international attribute which folds it down under 3%? julia: if you look at the pickup between 2016 and 2017, that has global roots. saw a surge in china, a surge in emerging markets. the destiny of the u.s. this year will be tied to how long this bull and global manufacturing last, and i expected to cool off. the u.s. consumer has been quite a bit more subdued. they have been reacting a little bit to the wealth, but they are not leveraging it. it really is a global phenomenon. you have to look abroad to the outlook and i expect some moderation this year. francine: does the tax overhaul change that a little bit? will it push americans to spend? julia: i think actually when we put in such a fiscal stimulus at full employment, one thing is that most of it goes to corporations, and they will thennd more through capex through hiring and wage increases, despite the headline we will see a decent capex outlook, but that depends on how much

time for commodities in general. .rancine: thank you so much we will be back with daniel morris of bnp paribasg up, conversation with the iea executive director. look for that interview at 11:20 a.m. in london. this is bloomberg. ♪ ♪ taylor: this is "bloomberg surveillance." i am taylor riggs. let's get the bloomberg business flash. foras found a temporary fix an engine problem that led to the ground of almost a dozen of air 323 to the engine maker would replace a new seal with the original one because of durability issues. -- is working on a permanent fix. sprint has gone back to the junk bond market for the first time in three years. the smallest of the 4 leading u.s. wireless carriers spelled -- sold junk bonds. it's a sign the parents have no immediate plans to provide funding for the cash-strapped company. the soccer player that many consider the best in the world is not for sale at any price. bloomberg spoke to the president of barcelona. >> we have a club we wanted to have -- we like to practice this unique way of futbol we do when we play. -- is our key player. taylor: messi's current

a deal could be signed next paribas,h hsbc, bnp and lenders who have agreed to provide funds, part of project that is due to come on stream in 2019. spacex passed a major milestone with the successful first launch of its brand-new rocket. the falcon heavy is a reusable booster that allows spacex to handle bigger payloads such as commercial satellites and missions for u.s. national security. ceo elon musk has said the launch would be considered a success the falcon heavy did not explode after liftoff. they really went as well as one could have hoped. [indiscernible] it was probably the most exciting thing i've ever seen, literally ever. and then the center core mostly did land. ramy: global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ramy inocencio. this is bloomberg. haidi: thanks for that. we are going to head back live to the world capital market symposium and kuala lumpur, anere it man -- where yvonne m is standing by with our next guest. getne: we've been trying to a take on what is going on in the markets here and how it