stephen engels of commerzbank.ng to do about the future of german banking and a revenue shortfall. this is bloomberg. ♪ g. ♪ the latest innovation from xfinity isn't just a store. it's a save more with a new kind of wireless network store. it's a look what your wifi can do now store. a get your questions answered by awesome experts store. it's a now there's one store that connects your life like never before store. the xfinity store is here. and it's simple, easy, awesome. comcast business built the nation's largest gig-speed network. then went beyond. beyond chasing down network problems. to knowing when and where there's an issue. beyond network complexity. to a zero-touch, one-box world. optimizing performance and budget. beyond having questions. to getting answers. "activecore, how's my network?" "all sites are green." all of which helps you do more than your customers thought possible. comcast business. beyond fast. >> this is bloomberg surveillance. tom and francine from zurich and new york. let's get the fir

matt, you are in frankfurt tracking down the commerzbank story.wner, but commerzbank is having to cut down on these targets. matt: no longer able to meet its 2020 targets for headcount reduction or for a return on capital equity. i'm going to go talk to the cfo and see if he thinks they are more likely to be forced into a merger with deutsche bank, that interview at 11:30 a.m. u.k. time. this is bloomberg. ♪ ♪ president trump may push back the deadline for higher tariffs on china as the countries continue to negotiate. the recession, germany posts zero growth at the end of the fourth quarter is it a blip or the worst to come and turning it around, credit suisse is trading losses eclipses gains and wealth management. >> i am convinced we will outperform. we're seeing signs of that, positive.

we have commerzbank and credit overnight, a out tale of two different banks. commerzbank up 4.4%. credit suisse is now down. initially, it was up 2% or 3%. then they got concerned because they lost money because of their trade. vince: that is going across the board. all of them are having problems with trading. a large part of that is banks have opened up the trading market, complete transparency to the buy side customers, which has completely limited their ability to gain fees, which is marketing a product, and it also opens this up to other players to come in and provide liquidity to customers at a cheaper basis, so the banks don't have the advantage in the trading markets they had before. you see it in the numbers. alix: why don't we know that by now? why is this continually being a surprise for us? gina: i don't know if it is a surprise on the fourth quarter. all investment banks struggled in the fourth quarter because it's a lot about the outlook and the commentary with respect to the outlook. what created some degree of support for the u.s. financials. even though it was not

of course, nobody can force deutsche bank into a merger with commerzbank. even not the german government clearly deutsche bank is owned by its shareholders, but the market can drive the situation in such a direction that it could be perhaps too painful to stay -- yeah, to keep the structure as it is right now, to keep deutsche bank independent of another bank. so some people are saying if the shares fall below seven, this is a crucial landmark we have been there nothing happened the big guess is when is it going to be too painful for deutsche bank to keep itsing current structure and also when is it going to be too costly looking at the bond side of things to finance this huge balance sheet of the bank going forward, under the, as i said, current structure. i guess the jury will be out at the latest at the end of march when deutsche bank will present -- or end of april, i should say, when deutsche bank will inform us about the development in the first quarter. back to you. >> viewers could probably notice that's mr. seving delivering at his annual press con

two men extent, commerzbank wasn't as -- to an extent come extent,rzbank -- to an commerzbank wasn'ts exposed. the retail banking managed to add clients. it is really a relative story of who is looking less vulnerable in this kind of market. that was what the market was reacting to today, and as you pointed out, they have quite quietly demolished a lot of expectations, and they have removed a lot of these targets, and scaled the backseat evidently. backaled them significantly. vonnie: still ahead, our interview with jim rothman of lazar on why some recent success stories could draw more money into the area. this is bloomberg. ♪ guy: live from london, i'm guy johnson. vonnie: in new york, i'm vonnie quinn. this is the european close on "bloomberg markets." shares of yelp are on the decline, down about 2% after jumping almost 12% post market yesterday after its fourth quarter earnings report. kailey leinz is here to explain the reversal. is it not just giving back a little of the gains? kailey: some of it probably is to do with the larger selloff, but analysts are saying the guidance t

guy: it encourages us to believe that deal is more in the cards. >> commerzbank was better than people a lot of the analysts expected. it does not take away the thesis that together there will be a strong german national banking champion, which the regulators are clearly in favor of. this quarter did not do anything that theye us from are extremely strong banks on their own. guy: thank you. coming up, the world's biggest weekend on earnings tomorrow. we will highlight what we can expect. that is next. this is bloomberg. ♪ this is bloomberg. ♪ guy: breaking news over the last couple of minutes. the president of the u.s. will be speaking today in florida. sarah huckabee sanders is giving us a little glimpse into what we can expect him to be talking about. he is likely to focus on venezuela, the crisis taking place there. the president will say that the path to democracy in the country is irreversible and maybe add a little fuel to the fire, he is also going to indicate that the u.s. knows where the venezuelan military has hidden the money that he feels has been expropriated. we will see

does today's set of figures shortened the odds for a merger with commerzbank later on this year? all that is happening with this company is out of control of management. we talked to the cfo earlier on. we will hear more from that coming up. vonnie: the jobs report this morning. you might have expected the s&p would be higher than this. it has been. it is flat on the session. one of those better earnings stories. for cancer treatment having a blockbuster quarter, and that is sending the stock up. oil companies having good earnings, up 4% for exxon. not so much for amazon. some pause with amazon. it is down 4.5%. guy: january incredibly strong. we had a strong emi read out of the u.s. -- pmi read out of the u.s. joining us from vanguard, from pennsylvania. nice to see you. thank you for taking time to join us today. we find ourselves in a situation where we continue to get decent data out of the u.s. today's ism number on the manufacturing side really strong. are we underpricing the fed? is the fed underpricing the fed? >> it is so interesting. not 48 hours ago, we had the chairma

does the commerzbank merger happen? is that the catalyst for the rest of the sector?n pointingerman papers to the decision coming before the elections in may. it does not change the landscape on eight european scale. landscape ine germany because it creates a more dominant german consumer bank. the rest of the bank -- market is still fragmented and even deutsche bank would not be sufficiently large. tom: this is important. bring up the chart. logarithms, work in i am sorry, there are these lows in deutsche bank. you say they're trying to get to may. if the stock price of deutsche bank breaches the december lows, do they have the luxury of getting to may? elisa: yes, i would think so. there is no reason to force a merger overnight, there are no concerns about liquidity. it is more a question of how long germany wants to ride this out and parliamentary elections could make things more difficult. francine: overall, when you look what is happening to the french bank? they were the best in class 18 months ago? tooa: both of them relied heavily on the investment banking bus

vonnie: should we look for a resolution for commerzbank, deutsche bank, in the next quarter or two, orhey stumble on for a few years? elisa: i think that is -- the talk has been another could be acceleration of potential discussions. the management at deutsche bank has said that they want to proceed with their plan, although they have not ruled out conversations at some point with commerzbank. obviously, the first quarter will be very important. it is early days in terms of how the business is holding up. the pressure will be relentless. guy: thank you very much indeed. elisa, thank you. vonnie: now first word news. courtney: the u.s. trade deficit tol more than expected $49 billion. imports declined in exports fell a little less and 3%. president trump talked about trade in the state of the union and he has vowed to get a fair deal with china. >> i have great respect for president xi beta we are working on a new trade deal with china. real, must include structural change to end unfair practices, reduce our trade deficit, and protect american jobs. [applause] courtney: the house intell

alix: may be and commerzbank maybeet together -- deutsche bank and commerzbank will get together.nday, the conversation seems to be they will be diverging. what is the conversation now? catherine: we've got a lot of different pieces of information from the fed statement. saying diplomatic way of -- catherine: for both of the central banks, what's happening in the global economy is a key ingredient. the u.s. tends to not look at that as closely as the ecb. this is an important headwind affecting the growth rate. they both are facing external headwinds. the u.s. has the additional issue of financial market turbulence. that is less of a concern in europe because credit is still strong. the u.s. has two challenges, external and financial, strong labor, strong domestic. david: thank you very much, catherine mann of citi research. from sport betting to big tech ads, we look at big money and the super bowl in today's wall street beat. this is bloomberg. ♪ viviana: this is "bloomberg daybreak." hour, thein the next paycheck ceo. hedge fund manager david einhorn trying to make up for a bad

bloomberg has learned executives believe a government brokers merger with commerzbank is possible.re is a lot of talk in the sector but over time, mergers and consolidations in the european banking sector would be sensible. we attended to agree with that and how long it takes to do is kind of anybody's guess at this point. viviana: all of that interview -- i will have an interview with the deutsche ceo in a few minutes. the uk's beginning to lay the groundwork for a potential delay on brexit. the prime minister says she doesn't want a delayed exit from the european union, but she is still time to come up with proposals after parliament voted to scrap key parts of her proposal. global news, 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. tom: thanks so much. at 7.62.bank flat on the s&p 500 before all of that data. currently steepening still off of the palo presser and the fed meeting. euro stronger over the last several days. the vix, 16.59. that is an awfully good number. ten-year. a

alix: commerzbank reporting net income and profits were positive and beat estimates, also increasingidends as well. so it is actually a good day for commerzbank. >> the plan is to keep on doing the things that have been working the last few years, which is basically growing revenue and cutting costs. in that sense, i think that going for a proper return is what every management team is striving for. but again, given that germany is one of the most deposit-rich country around, the negative interest rate is actually weighing on the business now. emily: amazon has scrapped plans to build half of its new headquarters in new york city. the tech giant faced major backlash after the city and new york state promised it nearly $3 billion in financial incentives. a company statement reads, "a number of state and local politicians have made it clear that they oppose our presence and will not work with us to build the type of relationships that are required to go forward." >> i think from the beginning, amazon miscalculated was what was happening in new york city. once the headline numbers about

coming up, deutsche bank's cfo is not ruling out a merger with commerzbank. our interview. this is bloomberg ♪ anna:anna: welcome back to the european open. we are 15 minutes away from the start of the cash equity trading day. european futures point modestly higher. dax up 0.3%. the rally stateside could run into an amazon shaped problem later. u.s. futures pretty mixed right now. matt: deutsche bank's revenue slump has deepened with the lender suffering its eighth consecutive quarter of revenue contraction. fourth-quarter earnings were hit by a drop in fixed income trading, which was down 23%. earlier, i spoke with the bank's chief financial officer. >> the results were in line with expectations informed by the context as we have seen through our earnings reports the industry faced in the fourth quarter. with that in mind, we were not as able as we hoped to stabilize revenues on a relative basis. being down 2% year on year in light of the backdrop that was the industries backdrop and some of the idiosyncratic stresses, we thought was reasonable. we continue to work on stab

it's been really interesting in terms of the beat from commerzbank.further pain coming from agricole are in terms of the banks. are we going to see more optimism from what we have heard on these trade talks? that possible extension prolongs the uncertainty, for me. manus: you had that chat earlier about that. when you see the allocations, it's interesting. it's about global equity allocation. it's the lowest since 2016. exposure to cash is the highest since 2009. that's the bank of america let's get advise -- to the markets around the rest of the world. we have the team standing by. let me take it first of all to you on the indian markets. they've had a very divergent move compared to the other asian markets. what you think that is -- why do you think that is? >> there are a lot of internals internal shocks the indian market is dealing with. we are down one quarter of 1%. markets have been like that for the past five days. a lot of corporate issues, specific companies have come off late. that could be weighing in as well. the broader markets pulling b

non-dollar mechanism it will be based in paris and managed by the former director for germany's commerzbank or the u.k. will head up a supervisory board a toronto was hoping that instructs would enable europe to continue buying it's all however process also as for now it will only use it to export food and medicine to iran last year europe opposed america's decision to withdraw from the twenty fifteen nuclear deal with iran under the agreement sanctions were lifted in exchange for to run limiting its nuclear program independent journalist things they'll be few takers when it comes to europe's new transaction system. it will be a trickle of companies daring do that it's much easier for chinese companies or for russian companies to to close deals through to make deals with iran the europeans are scared in an incredible way the companies if you talk to them they are afraid by ricochet of being in the eye off the storm with the americans trying to make an example because that's what washington is going to do for example it will certainly pick up a few examples and and be harsh on them and menti

it's under growing pressure to merge with rival commerzbank.oad because of brexit, according to a new survey. the institute of directors says 16% already had relocation plans while a further 13% were actively considering doing so. britain is due to leave the european union on march 29th. it's budget day in india and a big day for prime minister narendra modi — who is just months away from what could be a difficult general election. devina gupta outlined the highlights for us from delhi. it isa it is a budget filled with populism. four areas i can mark out from the budget, firstly, for small farmers, where the indian government has announced a $10 billion package, where small farmers will get about $85 per year, and that is going to benefit almost 12 million plus farmers. the second is for the middle class, where the limit has been raised. they will not be paying income tax. the third one i have noted down is the social security net, there has been an increase for daily wage labourers. the big ta keaway daily wage labourers. the big takeaway is

stacks is going to be a dollar mechanism it will be managed by the former director for germany's commerzbank or the u.k. will head up a supervisory board as of now instead is expected to focus mainly on food and medical exports to iran but it could expand in the future. last year you're opposed america's decision to withdraw from the twenty fifteen deal with iran under the agreement sanctions were lifted in exchange for terror on limiting its nuclear program but independent journalist look we're very believes a few e.u. firms will dare to go against washington. it will be a trickle of companies daring do that it's much easier for chinese companies or russian companies to close the. bomb you. are scared in an incredible way the company so if you talk to them they are afraid by ricochet of being in the eye off the storm with the americans trying to make an example because that's what washington is going to do for example they will certainly pick up a few examples and and be harsh on them and mention it in press releases and in public campaign so that's very dangerous for european companies i d

the stock market reaction, this is a company that replace commerzbank in the german bank index. 28% atradingown nearly this point, below the lows we hit earlier this week. the hedge fund manager, this was his biggest short position. deutsche bank, trading down by 1.81%. vonnie: let's bring in the head of capital markets from citibank for the americas. title suggests you advise smart money and you see where it is going. where is the smart money going now, what kind of decisions are being made? been tough to navigate, even though we have in most equity8% indices, it has not felt that way. this is the first week we got good news both from the fed in terms of supporting markets and solid earnings. what we are seeing is people are investing now, after that news this week. vonnie: where are the preferred markets? there have been jitters about china and now we are hearing that india is messing with amazon. kris: we like emerging markets asia. around been traveling the americas as part of our private bank.ti we have been having this discussion about what is going on in asia and how can you invest th

wirecard is the biggest in europe, displacing commerzbank in the dax.rket cap until today was bigger than deutsche bank. investors will be looking at this as a bellwether. what is going to be having with financial technology and the payment space, especially because it is so arcane? it is so difficult to understand the business models, how they do their financial accounting. it is a very complicated business proposition. if suddenly the message coming out is it is too hard to understand what is really going on, that is not good for anybody. much indeed,u very bloomberg's ed robinson. this is bloomberg. ♪ guy: time now for futures and focus. we want to get off with a chart that shows the daily trading brent.f brent is basically not bouncing around very much. the price action can trade in one direction, but intraday we are not getting much move. tim, why is this? therter: first, look at brent term structure. i believe you got the venezuela iran situation, and also something growing in libya as well, from what i understand. you've got that tightness there

believe they may not be able to avoid a radical solution such as a government brokered merger with commerzbankunless they can show improvement in the quarter. >> we feel we can control our destiny. we are executing against our plans. we are proud of having achieved the milestones we did, if it's the actions we took around the businesses or, frankly, achieving financial milestones that we promised the market. we intend to do the same in 2019, leverage all the work we have done with the businesses, stability in the platform, serving clients, executing on our strategy. all the stakeholders around us should see us execute on that and that puts us in control of our destiny. >> u.s. jobs are expected to rise for the 100th straight month in january. economists looking for 165,000 payroll additions and wage gains of 3.2% despite the partial closure of the government. we turn to michael mckee, who is live at the labor department. >> the labor market still strong. very little impact from the government shutdown. unemployment ticks up to 4%. 304,000 jobs created in january, but hold the champagne on that

journal" reporting the german government may move to merge or move to get deutsche bank to merge with commerzbankancisco bay area walgreens stores could lose their pharmacy licenses. they allegedly let an unlicensed worker act as a pharmacist. he was dispensing 650,000 prescriptions from 400 walgreens pharmacies. it was a rough month for hollywood. sunday's super bowl is likely to put a damper on the box office. the only film opening this weekend nationwide is sony's. president trump says he'll use the state of the union to talk about his border wall. "the washington post" blasting bernie sanders. saying bernie, you are dead wrong about what's happening in venezuela. we have the former number two u.s. official stationed in the american embassy in caracas. he's going to school bernie sanders. that's coming up. so you only py for what you need. great news for anyone wh- uh uh - i'm the one who delivers the news around here. ♪ liberty mutual has just announced that they can customize your car insurance so that you only pay for what you need. this is phoebe buckley, on location. uh... thanks, phoebe.

ftse 100 up .4 astrazeneca helping that commerzbank is one of the outperformers in the index there, andhe german index overall, i should say, up about 45 points for points terms i should also point out that the gdp number was released a couple of hours ago for the fourth quarter in germany came in at flat, 0% growth. germany has technically averted a recession. again, it's slightly worse than expectations, but still as far as the macro is concerned, germany did not enter recession in the last quarter of the year. the cac also up 0.6% gains are being led by airbus. let's switch and talk about what some of the developments in currency markets as well today you can see it's being expressed mostly in cable, which is trading about .1% weaker today 128.30 is the level. again, we have another day setting up for another day of discussions at the house of commons. we'll talk about that shortly. let's get on to the brexit story today, and that is that e.u. council president donald tusk has downplayed talks saying london has to post concrete, realistic proposals. tusk made the comments after meeti

the ceo of commerzbank told matt miller he can't work with negative interest rates.t and what are you to do about the chronic nature of negative interest rates for financial people, not fancy pants economists? right.you are absolutely is the key challenge. you could add negative interest rates. it makes it even tougher for the and investor to maintain the purchasing power. that is part of the raise middle income segments of the population are being so hard. it is incredibly tough. we need to get back to growth. we need a dose of inflation that is tough to achieve. the central banks have shown how difficult it is to get that back into the system. clearly, all of this uncertainty around trade conflict, brexit doesn't help at all. francine: thank you both. david are staying with us for the hour. coming up in the next hour is a spanish foreign affairs minister. with see the campaign being started for the election in spain. i believe that is april 28. that interview, a must watch. this is bloomberg. ♪ francine: this is "bloomberg surveillance." tom and francine as always

if all else fails, deutsche bank could be looking at a merger with commerzbank later this year. it is suffering its eighth straight revenue contraction. we are going to deutsche bank cfo who spoke with matt miller. >> the results were in line with expectations informed by the context as we has seen through our peers earnings reports that the industry faced in the fourth quarter. with that in line performance we were not able as we hoped to stabilize revenues on a relative basis. being down 2% year on year in light of the backdrop that was the industry backdrop, and credit stresses we faced, we thought it was reasonable performance. we continue to work on a stabilization and growth of our revenues. we think we built a lot in terms of foundational improvements that will carry over to 2019. matt: deutsche bank had specific drop was theuch industry, and how much was deutsche bank specific? >> in terms of business, we are a leading rates and credit house. those areas were among the most affected in the market in the fourth quarter. the rate did impact our business in december. it is

deutsche bank and commerzbank coming together, the the landscape is shifting.onsolidation good for european banking? clifford: the speculation you refer to, there hasn't been much action. we feel we had scale in our core markets. we are all that interested in consolidation. in doingre interested is scaling our core businesses. you saw last year that we bought a small private bank in belgium and that improves the scale of her private bank, particularly in belgium. we would like to see more of that for our business. in terms of bigger consolidation, i would leave that to others to discuss the wise and wherefores. we are sticking to our business and ensuring we deliver the profit numbers we all expect. manus: don't give the regulators anymore issues to deal with. thank you so much, clifford abrahams. ♪ i'm a veteran and the army taught me a lot about commitment. which i apply to my life and my work. at comcast we're commited to delivering the best experience possible, by being on time everytime. and if we are ever late, we'll give you a automatic twenty dollar cre

that is mostly done by the public banks in germany, but that means the big banks, commerzbank and deutscheoose how to make that work and do not want to. you'sdam pros and, thank -- adam posen, thank you so much. brian levitt quietly with us. let me tell you about bloomberg radio, 16 minutes of mark carney and the beer we announcement. .- boe announcement look for that morning briefing on radio. please stay with us. this is bloomberg. ♪ ♪ bloomberghis is "surveillance." mergergest global bank and a decade, bb&t and suntrust banks will combine in an all stock deal to create the sixth largest rank in the u.s. bb&t shareholders will own 64%. more problem for pg&e and san francisco. they contained a gas leak in a pipe that exploded under a major thoroughfare. no one was hurt. declaredek ago, pg&e bankruptcy after $30 billion of liabilities from the wildfires. shares of soft bank soaring the most in years after announcing the biggest buyback in years. they are trying to close the gap between the value of the company and what they think it is worth. that is the bloomberg business flash. tom: you

consolidation would have to start with deutsche bank and commerzbank and go cross-border, or do you starthing to do in europe, with in arm is natural -- national retrenchment -- enormous national retrenchment after the deficit is to maintain close borders. that way, you have strengthening andanking in each country maintenance of strengthening of competition as well. that is the only effective way to proceed. francine: is there a regulator appetite for that? willem: at the moment, very little, i am afraid. the national retrenchment is still very much part of the mindset of bankers and it hasians, because remained clear throughout the financial crisis that your government stands behind you if you are a troubled bank. it is not whatever cross-border government may be looking after subsidiaries or branches. tom: give us the recession unit. the character of this gdp slowdown that you see forward, is it cyclical of a recession nature or is something more going on? willem: this is just a recession. in some ways, we are due for one. we have had quite an extended recovery, and cycles happen, even

is perceived in the market, you can see deutsche bank's credit risk is substantially higher than commerzbankmored to be the candidate that the german government would like to see happen. you can see it has been steadily climbing the past few months. the key question here is deutsche bank as to raise a whole bunch more funding to create a capital letter. it is just, how much will it pay to do this? and how much will that erode further its worthiness, creating this unfortunately both events? that is something a lot of people are watching. scarlet: thank you so much. let's stay in the world of banking because you wonder will it be prime real estate for m&a in 2019? bb&t and suntrust set the tone. explored latele last year. it gets our attention because the buyer was reportedly jp morgan. it?ery interesting, isn't the animal spirit is moving in the right direction when it comes to m&a. they explored a sale at the end of last year.it entered talks with j.p. morgan chase . the deal fell through sometime in december because they could not come to see eye to eye on price. this corresponded with the

this is the reality in the commerzbank. the ceo said we cannot make money with negative rates.o be all of europe in the next quarter? jonathan: hsbc was a hong kong u.s. rate story. competition steps up. rates for them, they were supposed to be the most immune. if they are struggling with all of the excess liquidity they have got, you can imagine why europe is in such a mess. john, if europe is in such a mess, what is the prognosis? what institution gets europe going towards clearing markets? the prognosis have to be at some point the regulators continue to backpedal and make it a little bit softer. you need changes to liquidity and capital. in revenues, going nowhere. you have to much tossed in the system. lows.at multi-year germany.shipping in there are plenty of places we can start worrying about. francine: thank you so much for the debrief on banks. howod's hands that is brexit is warned as the prospect of a delay is raised once again. the divorce deadline looms. we talk brexit next. this is bloomberg. ♪ i'm a veteran and the army taught me a lot about commitment. which i a