deutsche bank and commerzbank confirm they are in talks.loomberg users can interact with all the charts we have shown at gtv . ♪ ♪ >> good morning from abu dhabi. i manus cranny with nejra cehic in london. this is "bloomberg daybreak: europe" and these are the days top story. double trouble. deutsche bank and commerzbank finally confirm merger talks, but a tie up could see job cuts in the tens of thousands and retrenchment in key markets. we are live in frankfurt. theresa may asks mps for an honorable compromise over brexit, and the chancellor warns there won't be a vote this week unless tory eurosceptics back down. mliv from baku. the chinese oil minister tells bloomberg it is too early to discuss an extension to output cuts, but urges commitment to the current agreements. >> until we see it hurting consumers, until we see the impact on inventory, we are not going to change course. ♪ nejra: good morning, everyone. welcome to "daybreak: europe." rival lenders deutsche bank and commerzbank have confirmed they are in merger talks. both ba

he is talking with commerzbank and commerce bank is talking commerzbank is talking with him.really convinced of the project but i don't know that this project will take place. matt: it is interesting that schulz, the social democrat finance minister would be behind a move that would risk thousands of jobs. why do you think the finance ministry is so set on this? does the german economy need this kind of merger? this: it does not need kind of merger because both banks are active right now. germans can go to them and make business with them. there is no real change on the situation after a possible merger. and we are in an election year. in my point of view, that is the real reason why they are pushing this project forward. and once again, i don't think 30,000 jobs would be enough. the number is even higher. we are talking to 40,000 to 50,000 jobs. look at what happened when commerzbank took over years ago. a number of jobs which is jobsly the number of the of the bank they took over is now gone. the ministerve standing behind such a project where that many employees can lose t

. —— commerzbank.interesting to see this has come around again because it is not the first time the leaders of the two banks have talked about merging with deutsche bank or with commerzbank, and it comes ii yea rs with commerzbank, and it comes ii years after the financial crisis, with deutsche bank being very much mired in the aftermath of the financial crisis, and struggling to adjust its business model to sustain profits as its american counterparts have managed to. and just explain something, if you can. the investors don't seem entirely happy with the move. the unions oppose it. and yet the share price went up for both banks yesterday. how does that happen? well, i guess... first of all, it is good to see that there is some movement, and because deutsche bank has been... management has been trying to... well, modernise the bank and to transform the bank in the past couple of years, with somewhat limited success, and so i guess it is good to see that both banks are addressing this issue, after we h

the other story we are watching his deutsche bank and commerzbank. we understood these will perceive with a possible merger. commerzbank rising as well as deutsche bank. these two adding to the dax. been weakerling has all morning in anticipation of what the speaker might say, staying theresa may cannot bring a meaningful vote without changes. we'll have to see what will happen in the next few hours. in the u.s., we have the s&p 500 just barely making gains, about 10% higher. boeing drags on the s&p 500. down more than 2%. the faa saying maybe boeing had too much control over its own checks and balances. boston scientific dragging down the s&p 500 on a heart device as an fda panel will be discussing the kinds of devising and mortality rate -- devices and mortality rates. isifferent heartfelt story edward life-sciences. that company is doing well after trials went well for it and it's about device. that is what is going -- its valve device. guy: let's get back to breaking news. the speaker of the house of commons has blocked another vote on prime mini

commerzbank has a valid business model and is doing quite well. not sure how fond they are of the merger. francine: thank you so much. let's get straight to the bloomberg first word news. the euro plunging yesterday to a 20 month low as the ecb downgraded its outlook for the european economy. some policymakers see even this kind as to optimistic. bloomberg understand they think the projected pick up in the second half of the year might not materialized. mario draghi says growth risk is still tilted to the downside. is suing the trump organization. he claims the family cheated him out of millions of legal fees and costs. previously pleaded guilty to nine felonies stemming from a federal probe. china's imports and exports slumped in february. it also wasn't helped by the weeklong lunar new year holiday. these are signs the trade feud is increasingly impacting the global economy. the u.s. ambassador to china says the deal can be made. i think significant progress has been made and are more hopeful now that i have been in a long time. viviana: the out

bank and commerzbank could give wall street a run for its money.o matt miller in france. what are the chances of an agreement? this is something that has long been speculated, and talks have informally gone on for months. they last talked about the possibility of a tie up in 2016. there are a lot of hurdles. the ecb is not for this kind of deal. neither is the local german regulator. a lot of analysts are skeptical about the possibility of success , putting two weak banks together does not necessarily make a strong one. then there is the concern politically about firing up to 30,000 employees. remember when too big to fail was considered a bad thing? but her weot of time would get an official merger announcement. get anre we would official merger announcement. take years tod get efficiencies in. deutsche bank might need to raise capital. a great couple of points, especially on integration. deutsche bank is still integrating the postbank, a six mergern billion euro made 10 years ago. they are not finished. is the capital raise. analysts are telling

we had confirmation that commerzbank was in talks with deutsche bank.pports that, and a chancellor in waiting, we will see what she tells john she will do next. this is bloomberg. ♪ 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. ♪ francine: brexit blind-sided, theresa may's tort vetoed -- plan for tito did. torpedoed.n for 2 -- the former new york president bill dudley says tightening could be back in way this year. oil holds near 29th -- 2018 highs. good morning, this is bloomberg "surveillance," live from london and new york. i am francine lacqua with taylor riggs. we look a lot on brexit trying to figure out what theresa may's next move is, and we

commerzbank is up more than 3%. reported over the weekend it seems we have a momentum regarding the merger of commerzbank in deutsche bank -- and deutsche bank taking place. they confirmed talks that they are talking about a merger. this would be an all share merger. that stock is soaring this morning, up nearly six and a half percent -- 6.5%. ins is a real estate company germany. lots of gainers on the move. >> thank you very much for that. movers, including commerzbank, we will keep you up-to-date on that developing story. i want to get back to china. defining the yuan. -- un. they vowed not to use the exchange rate for competitive purposes. what country would do such a thing? the white house economic adviser also said he is optimistic about a deal being made. the senior manager at aberdeen is back with us from edinburgh. no country would ever use its currency for competitive purposes, but china has been accused of that in the past. should we believe that they will , trump being the most important issue here, that

there are asset sales that commerzbank could do. the asset management unit of deutsche bank is one such unit that has the interest among investors. there are many paths and it is early and deutsche bank has said it is early. -- theth it is early truth is it is early in determining the exact price. there are so many complexities. to put a price on that at this point is difficult. my guess is the banks are engaged in this exercise as we speak and that will be the stickiest part of the negotiations. vonnie: every time there's a story like this, management has come out and said actually not. we are not involved in this. you have to wonder where the providence of the story is. stocks down 3.5% today. at some point is it better for one of the banks to do something than to continually come out? sree: they did come out. it was the weekend of march 15 they came out and said the merger talks are underway. weeks intoeven two those conversations. when you look at the size of the banks, the complexity of the deals to be done, they of loan books.

commerzbank risk has related to italian bond and deutsche which has this giant trading book?are the main questions being asked. alix: who would be the buyer? aaron: it depends on the structure they agree on. the general consensus is deutsche bank is likely to be a big buyer, whether it is a stock or cash deal or a remains to be seen. at the end of the day, deutsche will be the acquirer according to who we are talking to. david: who will control the cyber? one of the issue is deutsche bank has not invested in technology and they've gotten tag for it. it was stronger in technology? aaron: it is a good question because if you look at both banks they have done deals where i.t. played a huge role. it isa boring topic but crucial because it costs a lot to integrate these systems. it was a bumpy died -- it was a bumpy ride it deutsche until the current ceo got involved. at the end of the day, they have two major systems, legacy ones deutsche and commerzbank are dealing with. they will look for what is the better technology. the deutsche's side with say we haven't, commerzbank would

germany's two largest lenders are officially in merger talks a tie up between bank and commerzbank would have a market cap of twenty five billion euros with nearly two trillion dollars in assets the german government is strongly in favor of the deal but many have their doubts after all due to struggling banks really make one success successful one. deutsche of bunchy for christians even and comments bankhead mountains have the green light from the german government to begin talks on joining forces to create a german mega bank which can compete with global investment linden's before a merger between the two banks can go ahead the state has to give up its fifteen percent stake in comet's bank but germany's economy minister stressed the government would stand back from merger talks. it's private banks they take their decisions and as you. decisions and the timing for so going to situation critics will on the merger could be complicated the banks themselves say they're approaching things with caution. francis fished there then the us is important that we only merge with comments by if it mak

deutsche bank and commerzbank ended months of speculation. they are in contact but will only merge if a deal makes sense. let's get the details from our editor in washington. this coming after various totructuring attempts failed convince investors. have they run out of options? tony: partly they have and it is a whole slew of circumstances that have come together. low interest rates, deutsche bank has tried and still has the biggest investment inc. in europe. short,tried and come up trying to take on wall street. faced aliens in fines. is economy in europe slowing. all of this is coming together in a moment where the deutsche bank ceo is running out of road and the government is saying we would like to sort of maybe not take control but serve more pressure. in terms of why they are backing troubled lenders, what does the government want to get out? tony: the argument has always been the economy is export dependent and companies, german companies who, as we know, are among the most competitive in the world, need a strong homebase think to bac

and commerzbank merging as both of them look just really for a way to put their troubles behind them that story and more with you the business team after the break i'm going to offer all of us here in berlin thanks for the come. six make. raring to me. if there is any product range between them you'd have to find it between the alliance . literature hundred german streets. and gemini with w. at any time time to place the news media in the manner you have an abundance of quite cool songs to sing along to see this to come from soup. to. interactive exercises. everything is online and interactive benjamin fulford with d. w. . it's official germany's two biggest banks are discussing a merger but is a possible tile both dogs are bankrupt from art's bank putting what the german government wants against what employees and investors want also coming up as five g. frequencies go up for auction in germany the question is do you can there be ultra . mobile networks without hardware from chinese tech giant huawei and you're of marks equal pay date but figures show equality is still a long way of

formal talks are to be held between deutsche bank and commerzbank. 0nce two of the mightiest lendersthe land, both have their problems and have found it hard to grow. combined, the two would cover a fifth of germany's high street banking business. a merger could result in massive cost savings, in particular by closing branches. the german union for the service sector, verdi, opposes the deal. it's warning that in a worst—case scenario, up to 30,000 jobs would be cut. deutsche bank stressed that any merger will not be rushed. it is important to us that we will only engage in a transaction if it makes economic sense and therefore it is his plan, a good integration plan and together with commerzbank we will evaluate this, go through due diligence and only when the results are they will we make a decision. saudi arabia has signalled that the club of oil producing countries, opec, may need to cut oil output even more in the second half of this year. global stockpiles are still rising despite harsh us sanctions on iran and venezuela — both major oil exporters. some energy ministers from op

commerzbank is out with their annual report. executives. but it is a slightly in your report. everything is slightly higher in group profits and slightly higher in annual results. slightly higher in revenue. and it is slightly in germany. francine: and it is slightly interesting to look at the m&a plans, tom. that is what anyone wants to talk about when it comes to commerzbank and if they will merge with deutsche bank. tom: the tan is gone and i don't know what to do. francine: moisturize. tom: i'm scratching my way through the morning. to the data right now, negative using sterling as a proxy for brexit. let's go right on to the second 11272.with euro mix in the 14.76. and a seattle slew of negative yields. this is the difference in yield between the tenure and the three months. it is not a vanilla curve. it is a negative rate. there is a -10 year yield that is down to -.04. and i put the u.s. 10 year huge perspective as well. i'm happy that you are doing the yield because investors are trying to figure out the economic outlook against thi

commerzbank around 6%. deutsche bank around 4.5%. these two banks have thrown in the towel and decided the only way forward is to merge. vonnie: we are going to make and green. boston.s us today from a lot on our plates today heading into the market sessions, the fomc, the possibility of brexit moves. what is highest on your priority list? brexit is highest because it could be the biggest turning point we have had since the referendum. that will primarily in fact the u.k. economy. -- impact the u.k. economy. it probably will not impact the u.s. or china. we are not expecting the fomc to do anything. supposedly to the deadline for brexit. what happens between now and then? it seems like theresa may is trying to get enough support to pass this deal. she is looking at a long extension of article 50 to galvanize people into supporting the deal. if we have a long extension, that gives those that want to to negotiateime that. it is not clear she can get support to pass for deal. they might have a vote on tuesday. if she doesn't have the su

they are also worried about commerzbank's loan book in the merger.funny is when you , deutschece like this bank, we don't like your investment bank. well, we don't what the loans you are making. [laughter] lisa: so commerzbank is worried about deutsche bank? that makes sense given the fines. but deutsche bank sand we don't think you have good lending. this highlight how this really is a forced marriage between troubled banks that both would have to be ultimately bailed out or supported by the different government -- by the german government? jason: that is ultimately what this shows. angela merkel setting up the table and being like, figure it out. alix: and qatari investors are in both. lisa: but they are not happy with this. alix: no. not many people are happy with this. alix: you had the privilege of talking to the co-ceo of ppg. here is what he had to say. >> when the news first broke, it was, as you might imagine, pretty shocking. this is something we had no knowledge of or no idea this was all happening. so any time something like this happens,

won't play soccer for commerzbank and deutsche bank continues.been talking about that this morning. and looks like the merger is stepping up. top executives in talks according to german magazine focus. commerzbank down from the highs of as much as 1%, now just about half a percent. deutsche bank, for its part, a slight decline following most banks lower. a big gain over here, about 18.5%. mike allen has actually said he is stepped up his bid for the company, of course, ashley is from sports direct is called for a meeting to remove all of the board members, if not most, and put him in charge. anna: think you very much. up next, shifting the blame. theresa may will not support that in europe's court with a speech to it but will she win any more concessions before next week? that is next, this is bloomberg. ♪ anna: welcome back to the european open. 44 minutes into a negative trading day. it is international women's day and they have unveiled the ranking of representation of welfare and women in the workplace. here are the reports and i will hit you

to try to bail them out that way what are we going to see there richard nothing good commerzbank doesn't have a very good business model itself at best they're hoping to be able to strip bit of expenses from commerzbank in terms of management team and be able to use that expense to help recapitalize. and scrap this what we kept ration is we're not going to bank makes makes a. have that power earnings goes to the bankers a sponsor's so the bill is slow process by which you could possibly wreak havoc was one of these institutions by way by design all the losses are going to be could be recognized today without disrupting the financial system don't you think we can show a massive black hole where it used to have equity that would also be ok because people who are dealing with going to a bank i don't want to deposit insurance to get repaid or they would expect the german government to extend. the us insurance to the wholesale work so literally all the losses could be realized unfortunately that are the game that claim for the last decade. with the regulators is they're trying to. right to be

jan-patrick: that would make perfect sense, i guess, especially since commerzbank has produced a lots invest -- reduced a lot of its investment banking activity and focusing more on the classic banking. not immediately selling the investment banking arm, but at least having the option to do something else with it. guy: what other options does deutsche half at this point? jan-patrick: ha, not too many, i guess. commerce bank is the only lender grupo would make sense to merge in germany. the other option would be something cross-border, but that is more difficult than doing something in germany, because the rules of the framework is just not there for any cross-border merger that is so big between deutsche bank. i guess for deutsche bank it is really the only way they can go, decides, of course,, doing something on their own and going down what they have started in making the bank little that smaller and getting books in order. guy: that is a tough road to go down. jp, thank you indeed. joining us out of frankfurt on the deutsche bank story. vonnie: great stuff, guy. we will keep our e

guy: one of the other big stories we are focusing on is deutsche bank in commerzbank getting together, the lack of profitability in the european banking sector, the governor of the bank of france has been talking about this a little bit. needs to haveecb a more wholesale look at what is going on in the rate structure and the unintended consequences in terms of transmission? krishna: they are looking fresh and all of this stuff. i have some sympathy for the ecb view, which is there are lots of reasons why european banks are not profitable and low interest rates are not the only thing. the difference between rates that are marginally negative or barely above zero, depending on the slope of the curve may not be dramatic in terms of their impact on the viability and profitability of european banks. my own view is they have to look at this not for the sake of the banks, but for the sake of their own credibility. right now, people look at them and say you are maxed out because you cannot do anything more because you will screw the banks. i think that even from the classic monetary policy pe

also the head of rates and credit research at commerzbank is with us.he program. if we look at the eu side, the eu has shifted its tone on the prospect of a note yield brexit, saying it's getting likelier. is it? is.: i still don't think it all the options are on the table. theresa may is deal itself. the eu is obviously wanting to get the u.k. i think we are looking for a softer brexit, but the problem for the u.k. economy is this uncertainty is not going to go away anytime soon and that is going to keep investors on the back foot. consumers as well. it further delays any prospect. christoph, as long as this uncertainty continues, is the prospect for the 10 year bund yield to go above zero and stay there a little bit difficulty apco -- difficult? >> i do not think brexit is the main reason for this we have seen of late. there is still the risk of a hard brexit, which is worth a few basis points, but at the same time, a softer brexit is also becoming increasingly likely. you have these extremes, and i would say bunds or european fixed income in general

deutsche bank and commerzbank have confirmed they are in talks to merge. you can see the stock on both of them is up today on the news. at the same time, is this the beginning of a renaissance in european banks? [laughter] alix: sorry, i didn't mean to laugh. gina: i think it is relatively selective for a lot of reasons. obviously there is a need. revenues are devastating for financials in europe alone, and thanks especially. there is no revenue growth. there is also no yield curve. there's a desperate need for an mende -- for m&a. whether it can move forward is whether or not they can to continue to push cross-border activity. that is difficult can see giving -- difficult considering the regulatory environment. there is some hope that could happen because there's some desperation. 3/4 of banks in the stoxx 600 are trading below book value. it is really a quite difficult situation for banks. david: in another world when these two large banks get together, you would be worried about concentration. but are we passed that because they are so weak? marty: you

a currently has a 15% stake and commerzbank.k and it would probably be the acquirer. let's bring up another chart. with the addition of commerzbank, potentially that could help deutsche bank's slump. it's at 25 billion, it could add another 10 billion euros to hit nearly 35 billion euros. i mentioned before, the employee base, 141,000 is where they stand, but these cuts, they have not been factored in. 30,000 is a huge chunk. not only that, investors may not be very happy about one possibility for the new entity needing a cash infusion. to alion euros according bank analyst. he says if that comes to pass, investors may not be happy because that means share dilution. early days yet, a lot of challenges to get through. ramy inocencio: there. we are heading straight to beijing to take a look at the impact of new policy measures out of the national people's congress the wrapped up on friday. we will be joined by james parker. this is bloomberg. ♪ ♪ the chinese government has announced measures to encourage more foreign investment. n

part of that might be due to write-downs to commerzbank, balance sheets.ve seen estimates of $4 billion. those seem reasonable to us. the other factor is restructuring. they will have to pay up front, will have to pay that in cash. these are all considerations. you could do a wide range of assumptions that get you to accretionumption -- or dilution. the bottom line is the management will be focused on putting together a credible plan because that has been the key issue with both banks. the revenue environment has not in any of the businesses and where they have had problems but they do need to put together a plan and follow through on that. shery: could those plans be derailed by legal risk? i think they have put a lot of that behind them. that has sort of been an issue that has hurt their trading business especially. i think there are legal concerns in terms of labor laws, things like that. obviously, that has been one of the reasons that perhaps they been hesitant. you really need big cost savings to make the deal work and make it accretive in out years.

find a commerzbank better deal than deutsche bank?commerzbank return on tangible capital in 2020, we are not going to make that anymore. cost income ratio is 80%. tell me they did the right thing. i will give you a bank who .annot make 2% anything left is cost. the only deal available they can is withhe table, deutsche's. last year,eal because there is nothing they can do, the prospect of rate hikes has disappeared. revenue will track lower and lower. they need to adjust cost space. francine: it is not only about cost. you hear about a big merger, you are told is it about culture. our two banks a good fit. jonathan: the only item they can improve on the p&l is the cost ratio. provisions have not gone up. they have gone down. they will go up. that will erode the p&l that the only lead management has is the cost. you need new people. thisld argue the culture, is not about revenue synergies. it is about cost synergies. is two bankss trying to go through turnaround efforts and both are failing. is that fair? jonathan: they have spent the

the week began with major news in european banking as deutsche bank and commerzbank officially opened discussions on a possible merger. david: deutsche bank over the weekend confirmed it will enter into an agreement with talks with commerzbank. the combined entity would have over $2 trillion in assets and a market cap. give us your best argument for why this merger might make sense. matt: i have been talking to a number of analysts, a number of investors, not a lot think the merger does make sense, but they all say deutsche bank and commerzbank have to cut cost. s. one way would be to shut down branch they was in germany and fire a lot of the people that they have working with them, 30, 000, maybe 40,000, maybe more. the problem is, a lot of the investors and stake holders outside of berlin don't think that this merger would make a lot of sense. a lot of people i have spoken to today don't think it's going to happen even though christian saving and martin selca have been pushed into talks by thierman finance ministry. >> the speaker of the house of commons blocked another vote on prim

jason: the proposed merger between deutsche bank and commerzbank could it -- could be the start of ainful process. >> you have these two large institutions to the bigger banks that have basically been in a painfully reorganization progress. they've not been able to tackle a longer-term decline in revenue and profitability. therehe last six months, have been increasing speculation that this would happen. notwithstanding the fact that there are lots of observers that point to the fact that putting these two institutions together, which affect and commerzbank, isn't going to help tackle the individual and combined weaknesses, which are namely that deutschen bank brings to the table, that is inefficient. of course, the two combined institutions would still be extremely exposed to the interest rate cycle, which europe is in negative territory right now, but also, to a german commercial banking industry that is conditionally competitive. carol: i felt like it was one thing after another that is pushing back against european financial sector. you talked about low rates and rising costs. the

together with commerzbank we will now evaluate this. we will have due diligence. the results are there, we will take a decision. let's talk about oil. saudi arabia has signalled that the club of oil producing countries — opec — may need to cut oil output even more in the second half of this year. global stockpiles are still rising despite harsh us sanctions on iran and venezuela — both major oil exporters. some energy ministers from opec and its allies, like russia, have been meeting in azerbaijan ahead of a full meeting next month. we're joined by caroline bain, chief commodities economist at capital economics. what do you make of this? we pay such close attention when 0pec meet. what has changed? we have had a sharp rise in the oil price at the end of last year, which is due to the cuts and also the involuntary loss of iranians and venezuelan barrels. at the same time we have got record us production. 0pec must be feeling slightly nervous about its market share given the rise in us production, but at the same time it is enjoying the higher prices. it is quite a

is said to be concerned about commerzbank's credit worthiness.e is said to be concerned that the smaller rival has been loans,reful handing out raising the possibility of write-downs. joining us is dorothea schaefer, researcher at the german institute for economic research. great to have you. thank you for joining us. what does the finance ministry in germany actually expect from this merger? dorothea: the finance ministry is not really expecting that much from the merger, at least the finance minister himself says he's rather neutral about i t. but in the beginning, he was the first to talk about industry policy in the banking sector. y have confidence the finance minister is behind the talk of the merger. combined deutsche bank and commerzbank be strong enough to survive on the international level against other global investment banks? dorothea: they would certainly be a very large bank. the third-largest bank in europe. strong in the export financing, at least for german firms. they have abe that very realistic chance to become in the european

commerzbank is being advised by goldman sachs.ecretary general spoke to bloomberg after the opec plus meeting which took place in azerbaijan. >> it is practically impossible bring down the exports to zero. the waivers, the extension of the waivers continue to be one market growing in the because of the importance and size. gus: that is your bloomberg business flash. vonnie. vonnie: still ahead, fures "in focus." we'll speak about the dollar before the focm decision tomorrow. little more softness today. that's another session, several sessions, half a dozen or more of softness for the dollar. today one of the currencies that's benefiting from that softness, the brazilian real is up about a quarter of a percentage point. we know that president trump will be meeting with their president later on. having a bilateral meeting with him. we'll bring you that live as well. this is bloomberg. ♪ ♪ two-month extension, perhaps something beyond. >> we have to wait until march 20 to find out whether theresa may brings forward her plan a third t

and with the racketeering influence of all participants they want to do a shotgun wedding with commerzbank to try to bail him out that way what what are we going to see there richard nothing good for commerce bank doesn't have a very good business model itself at best they're hoping to be able strip a bit of expenses from commerzbank in terms of management team. and be able to use that expense to help recapitalized. around women with. the strap the slow recapitalization is when a data bank makes money makes a dollar earnings have that power earnings goes to the bankers as sponsors so the bilby slow process by which you could possibly wreak havoc lives one of these institutions by way by design all the losses are going to be could be recognized today without disrupting the financial system going to a bank we can show a massive black hole where it used to have equity but that would also be ok because people who are dealing with going to a bank i don't want to deposit insurance to get repaid eight or the expected german government when i want to deposit insurance to get repaid or the expected

the estimates out there at the mind and -- at the moment point at deutsche bank and commerzbank togetherpotentially is a 10% or 15% market share. that leaves them behind the hundreds of savings and corporate lenders they compete with. these companies don't actually need to make as much profit as privately owned institutions. so the combination of these institutions would do very little to change that. that, as you say, as part of the remnants of the banking union little to change that. which hasn't really happened. you still have distinct markets and distinct local regulators that still have a say in how these institutions are run and how the market can compete. jason: what happens from here? in your best estimate? elisa: i don't think there is a sense here that there will be a massive appetite to expand in europe, given the structural inefficiencies that remain. and this unfinished project, which is bank unions. even within the eurozone, the 19 countries that share the currency don't have a single deposit insurance guarantee scheme, for example. it means countries do not trust each othe

the board is also approved negotiations of commerzbank.ook at what's going on market wise. this is the vision on the hang seng. this is bloomberg. ♪ ♪ you are watching "bloomberg markets: asia." i'm juliette saly. >> i'm rishaad salamat. have groundedtors all boeing 737 max-9 aircrafts after the second crash involving then model in five months. all people on board the airline were killed when the plane came down outside addis ababa. stephen engle is having a look at the developments. we talked just a short while ago. what sort of the pictures being built? >> what is being built is a number of different airlines around the world are weighing in, some countries are grounding the fleets temporarily of 737 max-8, which is the model that crashed in ethiopia as well as indonesia back in october. we are not linking them as far as the cause.we do not know the cause . we do know the reason for the indonesia flight. we will get to some of the parallels in the minute, but let me run through some headlines. as far as the civil aviation administration

deutsche bank in commerzbank edge closer to a merger.omberg. ♪ viviana: this is "bloomberg daybreak." next hour,n the related companies ceo. i'm viviana hurtado with your bloomberg business flash. temperature -- tesla will raise vehicle prices. the electrical carmaker will shut down fewer stores than previously announced. after teslaes alarmed analysts by saying it would close most of its bricks and mortar stores. the company is in talks with china about ordering batteries to power its cars. carlos ghosn tried and failed to join a board meeting at nissan where he used to be chairman. nissan/renault and mitsubishi are planning to form a single board for their lines. -- their alliance. than 108 days behind bars, carlos ghosn was freed on bail. "captain marvel" is heating up the editors in north america -- up theaters in north america. disney says captain marvel's global opening of $455 million was the sixth biggest ever. that is your bloomberg business flash. lisa: we turn to the wall street beat where we cover three things wall street is

about a potential merger between the two and tim if you compare for example the doj a bank and commerzbank together they might have a market cap of a good thirty billion dollars in comparison to j.p. morgan it's worth about three hundred fifty billion dollars so more than ten times as much and if you look at the u.s. banks in the past couple of years they've done their homework after the financial crisis we saw billions of dollars in write downs we saw hundreds of thousands of layoffs with that they could restart sort of from zero and seem to be quite stable at this point and we cannot really say the same about the bank or other european banks either and also want to help some of the u.s. financial institutions is that here in the u.s. we have higher interest rates and that is also not the case over in europe. thank you for the moment but do stay with us. pressure is mounting on us aircraft manufacturer boeing the black box data flight recorders in their recent ethiopian airlines seven three seven max crash points to similarities the crash in indonesia in october of another seven three sev

bank said tosche overresistance from qatar his breakup with commerzbank.aking right now. coming up, more from brexit. we will have more on that on the european close. this is bloomberg. ♪ ♪ >> 30 minutes left in the european trading day. vonnie: this is the european close on bloomberg. let me update you on one story that broke a couple of minutes ago. abouttaris are concerned what is happening with the deutsche bank and commerzbank potential merger. that looks like it is progressing. doha does appear to have some concerns about this. the deutsche bank stock dropped and then popped back. the stock is down around 1% at the moment. a little bit of movement around on deutsche bank and the qataris having concerns. that remains a significant issue. let me take you back to the broader markets.

the management board has approved negotiations with commerzbank.xt the latest out of ethiopia, a second boeing 737 crash in the past five months is raising fresh concerns about the safety of that best selling jet. this is bloomberg. ♪ loomberg. ♪ 9:30 a.m. in sydney. futures looking like a downside, down a quarter of 1% when trading gets underway, asian equity futures lower, lower aussie dollar. wall street had the worst year of -- week of u.s. stocks all year. i am haidi stroud-watts. inocencio.ramy you are watching daybreak australia. let's get to first word news. sayseen: the pboc governor beijing and washington have reached consensus on many crucial issues. the talks asd meaningful. he said the pboc is exiting daily intervention of foreign exchange market and will never use the exchange rate for competitive purposes. u.s. discussede how to respect to the other monetary authority' autonomys. we discussed how both should observe market oriented exchange mechanisms. and besides it should observe earlier commitments made at previous g20 summit's. -

from senior officials to sell shares in the german lender, while discussions over a merger with commerzbank financial times, the german government is keen for the two banks to merge, which would create the eurozone's second—largest lender. and turkey's banking regulator says its investigating jp morgan for allegedly advising clients to short the lira. the move comes after the turkish lira fell by 6.5% last friday after a report from the us investment bank on turkey's economic outlook. jp morgan has declined to comment on the matter so far. that's it for the business briefing this hour, but before we go, here are the markets. japan down still over 3%. this will probably be its worst day of 2019. a0 schools across britain are to take a stand on road safety and air pollution over the next two weeks, by closing their streets to cars for one day. air pollution is linked to thousands of deaths in the uk every year. tim muffett reports. st luke ‘s primary school in brighton, home time. people double park, leave there engine is running, pa rents park, leave there engine is running, parents do it. i

deutsche opens talks with commerzbank after its turnaround plan fails.tails next. this is bloomberg. ♪ ♪ >> after months of informal talks and years of market value losses, they are starting official discussions on a merger. deutsche bank and commerzbank could give wall street a run for its money. what are the chances of getting a deal over the line? there are a lot of hurdles. >> that's right. as you said, it has been going for quite some time. months if not years. speculation and talking on and off, and they recognize yesterday that they have tried to come to an agreement. the chances of the deal are high because we have a situation which is really dramatic in germany. main vendors are struggling big-time, they tried to turn around the business for so long and they haven't been able to do so yet. despair, what are economist are saying. >> exactly right. but the thing is -- they have tried for so long and they haven't been able to, so they are going to have to come up with a solution. >> do you think this could trigger further consolidation in other eur

deutsche bank and commerzbank trading negative today. airbus still negative.odayping in paris finding deals is certainly good news for airbus. it is not enough to reverse the overall story at the moment. we have a negative equity market outlook, but the bond market remains the big thing. that is the market. s&p 500 in the u.s. is unchanged. the banking index is down another 3%. lots of economic data coming out this week as well giving us clues about inflation and wealth. i want to point to the yen as well. we are seeing just a little weakness to the yen. generally that has been there and is still there. the philadelphia gold and silver index is up. the price of gold is up. people looking for safety in gold. let's get to global macro movers. we have our g20 movers. in asia lowerocks a couple of percentage points overnight. we have some of the emerging market currencies bouncing back after a pretty disastrous day. they are bouncing back a little bit today. guy: let's get back to the brexit story. more than a million people marched through london this weekend, pr