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tv   Bloomberg Daybreak Europe  Bloomberg  February 15, 2017 1:00am-2:32am EST

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anna: hikes ahead. janet yellen warns its unwise to wait too long. manus: global gains for u.s. benchmarks. stock indices closed at all-time highs and asian equities charge higher. anna: lawmakers call for a closer look at the trump administration over reports of repeated contact with russia before the election. ♪ anna: a warm welcome to "bloomberg daybreak:europe."
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i'm adam edwards. -- anna edwards. manus: let's kick it off with credit agricole in france. euros, belowlion the estimate of 315 million. the focus is on the french ranch network and the focus on mortgages and how much they've mortgage by french customers refinancing their mortgages. this is a bank that we focus on greekre market after the crisis. the ceo is expanding areas such as asset management and record low interest banks have been taking their toll. downmonth they had a right of the french branch network after a massive mortgage refinance.
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consumer swapping their mortgages. the headline coming through on the fund manager majority-owned by credit agricole. they will reduce their state to 70%. and they have plans for capital increase in march or april of next year. talk about the dutch lender 70% owned by the government. $.84 and a total dividend for the year, they are happy with that. a capital ratio of 17% at the end of december. think back to what deutsche bank and credit suisse are telling us in terms of their core equity tier one. they're planning to cut 60 of the 100 senior management john -- jobs. the workforce is expected to drop by 13% by 2020. we will speak to a couple of
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different people throughout the next hour. we have the ceo joining us on the program and he will be here at 6:50 u.k. time. anna: and we will speak to reddit agricole, the team will bring you that interview with france's third-largest bank as well. let's get to numbers from heineken. also adjusted profit numbers came in pretty much in line with estimates. revenue growth up by 4.8%. let's talk about where markets have been. manus: janet yellen is a woman -- sounds as if she doesn't is in a mood to hike without data. let's look at the risk radar.
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in the u.s.dices cranking out to record highs. the dollar is pretty phlegmatic at the moment. it had a bit of a spike yesterday, waiting to remove accommodation, that was the message to the market. senior government bond yields, they are rising in the u.s.. the nikkei up by 1.0 3%, underlining the positivity around global equities. banks doing nicely and the oil price down below $53. let's get the bloomberg first word news. here is shery ahn. aids to doll trump's presidential campaign had repeated contact with russian intelligence officials, according to the new york times, citing former and current
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officials showing repeated contact with senior russian intelligence officials in the year before the election. it also said the intercepted communications were not limited to campaign officials and included other a so it's of mr. trump. the u.s. president has overturned and obama era anticorruption rule that would force oil, gas, and mining companies to disclose payments to foreign governments. the rule could put u.s. companies at a competitive disadvantage. congress considering other obama rules, including one that protects waterways from mining and preventing mentally ill people from buying guns. malaysian investigators are continuing to search for clues after the sudden death of north korean leader kim jong-il and's half-brothers. according to reports he was targeted by two women at kuala
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lumpur international airport. the south korean spy service said north korea has been tried for five years to kill kim jong nam. toshiba shares trading sharply lower as its futures under question. its chairman resigned. the company is considering selling a majority stake in is profitable member judy -- memory chip unit. global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . this is bloomberg. manus: markets are marching higher. asia has cooled a little bit. the banks are up. the dollar is also on the move. asian stocks marching to the
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tune of janet yellen. financials and materials leading the rise. the asx 200 closing almost 1% higher. the likes of commonwealth bank and anz on the rise. the hang seng of about 1.4%. banks accounting for seven of 10 of the biggest movers on that gauge afternoon credit rose to a record in january in china. the shanghai composite up about up .8%,over in taiwan, rising four and eight session. , set suppliers on the rise to announce the first annual profit drop since 2008.
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-- toshiba sliding given its chaotic day around its earnings. this afternoon we did get an update that toshiba was said to request an extension of loans through march. having a solid day on the back of positive results in a steeper yield curve. at some of what we are looking at in asia. federal reserve chair janet yellen sees more rate hikes ahead if the economy stays on course. u.s. well before the senate banking committee on tuesday on capitol hill. bloomberg's michael mckee was there and he reports from washington. was simple, message short, and direct. the economy, hiring and inflation growing fast enough to justify additional rate hike. >> waiting to long to remove accommodations would be unwise. potentially requiring the fomc
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to eventually raise rates rapidly, which could risk disrupting financial markets and pushing the economy into recession. warn the fed can't make a forecast because it too early to know what fiscal policies the administration and congress will put in place and their impact on growth. we don't want to base current policy on speculation about what may come down the line. she said the fed will begin to draw down its balance sheet once it is certain it won't affect credit conditions. as for political questions, she said interrupting health care coverage for many americans would have -- what hurt the economy as people save more rather than spend. she declined to give a view on the border tax but set immigration matters to labor force growth and that's an important component in how fast the economy can grow. she said the fed is working on lightening the regulatory burden
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on smaller community banks while defending the beneficial effects of the dodd-frank law. she gets another chance to testify before the house financial services committee on wednesday. our global -- welcome to the show. kept marchellen alive for the market? she warned the market very clearly, we're not basing our judgment on the current interest rates on speculation. goal for march is going to be the first rate hike to get thear, probabilities of it higher. the big risk is to hike when the market is unsuspecting.
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a thinker messaging was good, maybe of march is going to be even more of a live meeting, it needs to be higher as we go into the next few days and weeks. she did tick the boxes. she's been mandated to keep unemployment low and it looks like were getting closer to achieving those goals that are part of those mandate. reacted, butkets not to that extent. >> it did not become a 50% , but thety or higher fact that they're not waiting for fiscal stimulus plans are any other political event, they are tracking the data they continuously track. it means that on paper, march is live. you expect them to have a little bit more higher messaging or perhaps a bit stronger hawkish words for march, to say that marches on this table but it's not dead, i would say. they all hit record
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yesterday, but there is a debate. plc stop american hoarding cash and doing buybacks? capital expenditure is the nets -- in growth for the u.s. >> the big indicator is the corporate process outlook. if your company that's expecting higher corporate profits the next quarter or next you're, you're more likely to take on the capex project. now that oil profits are rebounding, because we know the big rebounded oil prices, it's more likely some of the oil and general industrial producers in the u.s. are more likely to spend. it does have to do with the trump administration. if a lot cap -- of cash is repatriated come that could increase the capital outlook and affect the share buyback and
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dividend payouts as well. that's something we do have to watch a bit more. the bmp index slashing its red signal for u.s. stocks. it's hovering at the highs level since 2014, the love panic index as it is sometimes called. >> we do find that violations are a bit high and some of those bond proxies that have rallied so much on the low yield environment. there are places you can find value that i would not say are even be red and may flashing green. those are value stocks that have benefited or previously been hurt by low oil prices and investor nervousness and now looks a bit more interesting, given the inflation outlook. financials looking green across the board with the rate rising environment on the table. thanks looking more profitable, the margins everyone was worried about last year when interest
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rates were negative are low in europe and japan across the world now look more interesting given their ability to make the spread on the deeper yield curve. it comeow dovish was you talk about normalizing the balance sheet in the coming months, but the size of the balance sheet is still accommodate -- accommodating. i would say was more of a dovish stance, not saying if they will stop reinvesting those maturing bonds that come in periodically that they have on the balance sheet. i would've expected more of an indication as to how to taper the existing balance sheet even more. so that was a bit more dovish but the fact that one key thing that stuck out to me was the strength of the consumer.
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70% of gdp is consumption. how much more interest-bearing liabilities can -- u.s. consumption.e is a big thing . that's pension funds, savings, asked income interest rate savings that u.s. consumers can gain a slight increase in interest rates versus the feared mortgage payment. it's interesting to have comments around obamacare and what that could do to the u.s. consumer as well. sayingink at blackrock he's not entirely sure where the yield story is going. it seems there's a contrast between the structural reasons for yields to remain low such as technological changes, and at the same time, cyclically people are talking about what donald trump is doing and protecting themselves against higher inflation.
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>> it looks like interest rates should be low to try and support rose and squeeze as much of the population that is working and producing across the world. but cyclically, were coming toward the end of the cycle in the u.s.. where in the later part of it and you would expect interest rates to start rising, if only to have something to cut from the next time it is needed. janet yellen is looking at a little more of the short-term, that's her role at every meeting , every six weeks she needs to assess and make decisions. from the long-term, we're at a place where regardless of where the fed gets to the end of the cycle, we are lower than we have ever really been before and rates will stay quite low regardless. manus: stay with us, we have a lot more value to extract from you. bank makes its first policy decision of the
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year. manus: and we get jobs and wage data here in the u k. that takes us to mid day and we get mortgage applications in the united states. anna: then later we get inflation numbers. manus: an uphill battle in france. we assess the election risk for markets. anna: could a potential hurdle ?n germany cosan issue? manus: this is -- manus: this is bloomberg. ♪
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anna: welcome back. it's 2:20 in the afternoon in hong kong. hang seng up by 1.4%.
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janet yellen boosting equities another leg higher in the united states. let's get the bloomberg business flash. -amro reporting an increase in fourth-quarter drop, saying underlying net income rose to 333 million euros. that was helped by higher net interest income and lower provision set aside for riskier loans. we will speak to the ceo at 6:50 u.k. time. credit agricole has posted a slump in fourth-quarter profits. net income dropped after it booked a good write-down down at its french consumer banking unit and trading revenue fell. that compares with 300 18 million euro analyst estimates. joiningty ceo will be bloomberg for an exclusive interview.
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group beingestment bought for $3.3 billion in cash. principles have agreed to continue with the business which will remain based in new york. fortress will operate even as a japanese company establishes its own technology investment find. 2016an sachs did not pay touses to about 100 bankers underwrite securities offerings, according to people with knowledge of the matter. they say the move is more akoni and that in past years when many deal makers failed to impress their bosses still got something. company shares closed at a record high yesterday amid optimism for a positive regulatory environment under the trump administration. that is your bloomberg business flash. manus: let's focus our attention
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back in europe. the french election is tight and françois fillon is facing resistance within his own party. according to a french newspaper, his fellow republicans have been reluctant to set up campaign events for the candidate. he told party members his withdrawal from the election would create a major crisis. our guest is still with us. i'm drawn to the section where you talk about politics clowning some of the positives in europe. that is a theme we picked up with many of our guests. you also go further and say not a political risk is bad. >> the big story, a few years ago it was the reform case, how helpnew policy ideas can
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make more efficient the product market, the labor market in various parts of the retirement policy market. many institutions were excited for europe's future. lessened the emphasis almost concepts because it does look like the political chances for europe are bit more cloudy than the bright new future ahead. we have to way through some of these elections that might have winners that may not be totally for the european project and for reforms in the same way. manus: one is the daily nasa nations of whether marine le pen can win. times the have three vote she got back in 2012 to have any chance of making it into the presidential position. this is what she has to achieve.
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that aainly the risk is eurocentric candidate such as herself will come to put on a of thege to the idea european concept. you can see the potential for the euro terms of currency terms to fall at the end of april and may if she does start gaining steam. at the moment according to opinion polls, it doesn't look she is winning, but as investors start feeling in the market, does provide some opportunity for global investors to add a bit of exposure to europe just because of how cheap bodyweight and's are compared to the u.s., for example. anna: the political risk against the positives you see on the economic front, is this one reason to give more exposure to
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europe in assets? >> the estimations that keep getting upgraded are a good sign that companies are working on headlinesroving the to earnings for investors. if you look at some of the data that's coming out of europe, unemployment rates coming down. germany has always had a tight labor market but even spain is starting to come down slightly. there is still a lot of work to do there on the policy front but some change is happening. auto sales at record highs in some of the economies, particularly in western europe. thank you very much. up next, we will continue on the earnings theme. earningsout with their , the dutch vitamin maker salt fourth-quarter sales rise by 5%. we will speak with the companies ceo who will join us shortly.
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this is bloomberg. ♪
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manus: it's 3:30 in the afternoon in tokyo. the world's biggest yogurt maker , the market had penciled in 1.70 9 million. earnings-per-share growth above 5% in 2017. simmerd warned in the may have a tough time making those numbers. a quick recap, the net income is amiss. they were targeting growth of
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above 5% in 2017. and announcing a savings program of a billion euros. they're trying to turn around that dairy business and get it back to where it should be. anna: another company that's reporting numbers, the world's largest maker of vitamins has revenue torise in 7.90 2 billion euros. joining us from the netherlands is the ceo, great to have you on the program as always. haveuch visibility do you and what performance at the start of 2017, is it markedly different from the end of last year? >> we started the year very strong. if i look back to 2016, we had a very strong 2016, well ahead of our strategic goals.
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the underlying real sales growth is 4%. even die was up twice -- ebitda was up. we propose the dividend increase , so a very strong 2016 as well. we look with confidence to 2017. we see only january, but we started the year well. happy investors will be with that. can you give us a bit of an update on your input side of the business, that raw materials could rise this year? margins?at into the the increase of raw materials mainly affects our materials
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business. it's not so much affected by material prices. the material business could be affected a little bit by increased raw material input. had 17.5% ebitda margin in our materials business which is pretty strong. than the exact , it's beenentage growing firmly in 2016 and we forct the absolute ebitda materials to grow in spite of increased raw materials prices in 2017. anna: what about the chinese infant nutrition market? what is expected there for 2017?
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how volatile is that chinese infant nutrition business going to be? >> the infant nutrition business andhina is very important as you know, china is a large market. our total sales growth in china was 6.7%, in line with economic growth in china, so that's very good. there has been a shift a little bit in china with the infant pastla, dominated in the by the international players. now also strongly by the local players in china. those are our customers as well, so we benefit from the growth in infant formula. local players are the international players, we serve both of them. manus: let's talk about the pricing in the vitamin business.
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you've got chinese suppliers there, the story we talked to you about each time. are we near the trough in terms of pricing? do you expect an improvement in terms of pricing? is the supply issue petering out? >> i agree, you talk about that every single time. manus: please say something different this time. tell me something new. >> i don't know what is new, but maybe new insight. our vitamin business is only 30% of our total nutrition business. vitamin d is only 6% of our total nutrition sales. so let's not overshoot that. the level -- prices are the same level they were in 2015.
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they may drop a little bit more, but not so much. at this price, level we are very competitive. of course i like higher prices more than lower prices, but i feel comfortable with the pricing of vitamins and we specialize more and more with all kinds of ingredients, not just vitamins. i would like to draw little more attention to that. in some zen probiotics in all that stuff. healthy step that you need for your breakfast. anna: we've been writing it down we promised to vary are questions next time. let me ask you briefly about the change of the white house. when you look at the u.s. political climate, are you more excited by stronger growth prospects in the u.s. are worried about protectionism? >> i think protectionism in itself is a global company is
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not what we would advocate. , you want to take care of your own country yourself. the united states is a very important market for us and will remain. we showed good growth last year in the united states and i expect to see continued good growth. we are manufacturing locally in the united states ourselves. the u.s. is a good market for us. europe is rebounding, china is doing well, brazil is a little bit more a concern. i hope that the global economy will remain productive to each other because that's what we need in the world. manus: thank you very much for joining us this morning. don't worry, i want ask you about the pricing of those vitamins again. let's look at some of the stories making headlines today.
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commissionerropean for economic affairs is trying to salvage the countries fourth bailout deal since 2001. he meets with the prime minister and finance minister today to see if they can find common ground. the imf has rattled its saber in terms of debt relief. the germs in dutch have made their feelings clear on the story. and dutch.he germans talking aboutts 2.4% increase in january. according to people familiar with the matter, the number of employees in 90 -- denied an increase in pay is higher than the year -- then he year ago. anna: let's check on the
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markets. >> good morning, all we're seeing in the market is janet yellen fueling the trump reflation trade. not quite so much when it comes to the dollar and treasuries, pretty flat today after modest gains yesterday and the 10 year treasury yields holding pretty steady. it's in equities that were seeing the real moves. asian stocks extending the global rally, chinese stocks in hong kong jumping the most in almost three months, japan gaining on the weaker yen. global stocks at their highest since an all-time high reached in may of 2015. yields ticking higher in australia and new zealand. tenure treasury yields staying pretty steady but japan's tenure yields and in the commodities space, some weakness in shanghai. a mixed picture elsewhere, iron
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ore and oil down, falling on the u.s. inventory data. ,he msci asia-pacific index financials leading the gains are outperforming here. no surprise because of janet yellen's comments on potential rate hikes boosting those financials. currencies aree doing against the dollar, the taiwanese dollar is outperforming today. sterling, yen, and euro pre-much unchanged. this currency has risen more than 9% against the greenback, the most in asia. now the currency and benchmark stock index of the country trading at the strongest level since mid-2015. manus: thank you very much. peugeot is shifting gears a little bit in his bid to expand,
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exploring options for european operations. the move would used its position in the region, putting it behind volkswagen. about $9.1 million on the continent since it emerged from bankruptcy. our guest is still with us here in the studio from j.p. morgan asset management. , first comes to autos there was cost-cutting, now there seems to be in mandate. is that something we will -- now a.ere seems to be m& >> it's always something to look forward to in these high-volume businesses. autos is one you've seen over history a lot of activity has benefited certain companies in france. in general, from the sector perspective, it's looking not
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just at the manufacturers and distributors but some of the display are -- some of the suppliers, more than just the end retailers and manufacturers. looking at various parts that come from different parts of looking at companies providing better returns for investors than just the end. manus: the recoveries in the thatg complex, you like miners. is it predicated on growth? commodities is that it is not an open world and not a level playing field. that is a risk. risk forggest commodity producers in terms of nations are companies that produce so many commodities is quite high. if globalization gets squeezed tighter and tighter and trade is not encourage, but for the companies that require a higher
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the higheream, prices good. requiring a china lot of imports of commodities globally. it is a huge market. that's why the copper price took a huge leg up after the manufacturing data. people still need commodities and so you see support for those prices. reminder, you can watch top . anna: you can watch the video and follow all the charts and functions and reach out to the show directly by clicking on the
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button at the bottom of the screen. you'll get the added value of all the charts and all the functions on the site. up, the dutch lender ordered a 23% rise in fourth-quarter profits. anna: will we see further rate hikes in the u.s. this year? we will discuss the fate of the economy. manus: and the heineken cfo will speak to bloomberg after reporting full-year numbers that beat the street. stay with us, this is bloomberg. ♪
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anna: welcome back. it's 1:47 in the morning in new york.
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the red light is all about valentine's day. the session in asia has been pretty strong on the back of those comments from janet yellen. let's talk about the business flash. sophie, take it away. happy valentines. credit agricole said net income dropped to 291 million euros after a goodwill write-down and trading revenue fell, compared to the 315 million euro analyst estimate. the deputy ceo will be joining bloomberg for an exclusive time.iew at a: 10 u.k. softbank is buying fortress investment group for $3.3 billion in cash. its principles have agreed to
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continue to lead the business which will remain based in new york. fortress will operate independently within softbank even as the japanese company establishes its own technology investment firm. goldman sachs is not pay bonuses , according0 bankers to people with knowledge of the matter. they said the move is more akoni and than in past years, when many dealmakers who fail to impress their bosses still got something. meanwhile company shares closed at a record high yesterday amid optimism for a positive economic and regulatory environment under the trump administration. that is your bloomberg business flash. anna: oil drop below $53 a barrel with stockpiles expanding, signaling a worsening inventory overhang. one us through the latest
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oil investments. crude inventories were always going to be the non-opec elephant in the room. let's get down to the numbers for you with this chart that you can pull-up on your bloomberg. i've highlighted the line in is thehe line in white u.s. crude inventories. you can see a little uptick toward the end. 9.9 4i set to report million barrels last week, a bit different than what the bloomberg survey is suggesting. the build of how big is, we're still at the highest seasonal level in three decades. out from the vice-chairman of ish markets, saying higher oil markets would help and u.s. production grew by 5000 barrels a day this year. more downside risk coming, with
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the price ranging between $50 and $60 this year. and the latest by u.s. president donald trump bowing to overturn forcing disclosure of foreign assets. let's send it back to you. resultset's talk about n,om the dutch lender ab saying it was helped by lower provision set aside for risky lawns -- risky loans. us, thankave you with you so much. on a fresh read of your numbers, you're looking at a dividend. it's a good set of numbers but you are restructuring the bank. my question is, are we at the end of the restructuring story
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with human resources? you're looking to take out 60 of 100 major positions at the bank, we understand. >> indeed i have announced a new management structure, taking of june.he first the main purpose of that is to increase the number of business lines. we have doubled the number of business lines but the bank has also been streamlined in the last couple of years. that also means that at the top we have to streamline and that's what is being done. also less people at the top, that is correct. anna: one of the things that boosted your numbers is higher net interest income. how much can you count on that as a driver in 2017? how much do higher interest rates factor into your thinking this year?
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>> indeed, has been very robust. , asgood thing at the moment mentioned in our press release, for the first time since the new bank in 2010, we've seen loan growth in all our major loan book. loans in the netherlands improving on the back of a better economy, but also the mortgage book, we are the number one provider there for two years. that gives the volume driver with respect to net interest income going forward on the back of a better economy. we are very happy for our client that that is happening. manus: you're setting up a sweet spot for the government to think about selling more the banks this year. you are a ceo, running a bank. it's a sweet spot for the bank and the government to offload
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more of its states this year, wouldn't you say? >> 30% has been sold so we have dno for selling the rest of the banks. we did not get that yet, but when it's there the manner of -- minister finance has to decide about a sell down, but we are very much in favor of that. anna: by the year end, what kind of state do you think the government will have in your bank? >> that's really up to them. talk about the elections, it's a lot to play for on march 15 in your country. how are you preparing for a with some of the key cards in politics? how is the bank hedging the risk that may come from the dutch elections?
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>> our expectation is that there will be a coalition of four or netherlands,the coalition governments. that's a normal feature in the netherlands. timeink it might take some to get that coalition, but it will be a stable one and we are not really worried about these elections. we see the economy improving and our clients taking out more loans. aboutare quite confident the future of the bank and the dutch economy this year. anna: you cannot change politics, but of course you have to prepareyou have for it. is your bank making preparation for world that doesn't have the eurozone or at least euro -- fewer countries in the euro? >> we do all kinds of stress tests, but as you have said, are bank is mainly dutch at the
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moment, 80% of operating income is from that netherlands. and of course the lower pound as result of brexit will influence precision of the dutch economy. we have stress tests on that. but an accident is not a scenario we expect -- manus: one quick question going back to the business. you have one of the biggest shipping books in europe. any chance of pairing that back? >> we feel confident about that book. there were a lot of questions about energy, shipping, commodities. in thehown last year second half the year that were much less -- there were much less credit provisions for the book. i think we have shown that we can manage that. anna: thank you so much for your
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time today, joining us on the line from amsterdam. about what'll talk janet yellen said so far and what else she will say this week. this is bloomberg. ♪
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feds: chair yellen says the risk -- supports raising rates. she warns it is unwise to wait too long. indicesins for stock closed at all-time highs. asian equities charged higher. call for closer look of the trump administration under reports of repeated contacts with russia before the election. ♪ manus: it is daybreak europe,
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our flagship morning show right here in the city of london. i am manus cranny. anna: i am an edwards. -- and edwards. investigated in france over subprime statements in 2007 so this going back some 10 years around the french banking story. manus: let's see where that goes. we saw the kind of penalties that have come to bear on other banking institutions around the world. it provided to the public in good faith the information available to it about its exposure. weref any underlying risks identified. the investigation focused on information released by natixis. it does not call into question other prior or subsequent communications. under investigation and france. we will keep an eye on that story as it develops through the morning. let's look at futures. a little bit stronger at the start of european trade. manus: no doubt about it, the
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banks in the back of janet yellen saying i am a lady who is not waiting for the detail on fiscal messages from the white house. i want to get on and do with the agree have that for u.s. markets, record highs last night. be aware that in london, london is a .3 of 1%. dividends on bp and astrazeneca. three beasts as it were off the ftse 100. still up .3 of 1%. anna: working through what janet yellen had to say. part of the risk rate. i will show you weren't we have been on various assets. the dollar strength story in connection with yellen. that is the bloomberg dollar index. no need to wait for that detail on trump's fiscal plans. the dollar was up yesterday. that was a fourth day of advances. the u.s. reflation trade back in vogue. market,ice in the bull we are a little unchanged on the bond story this morning. manus: as far as the bond market
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is concerned, let's have a look at that bond board. larry says he is confused. what are you supposed to do if you are a bond trader? we have had a full day run theer on yields, 2.5% and u.s. session yesterday. the probability of a rate hike in march, that is a deliberation in the market. is march live for janet yellen and the federal reserve, and edwards is never far from the function. this was before the big reset in marketing. we did not see this jumped off to 50%. it is not off the table. let's get the bloomberg first word news. >> eighth two donald trump's presidential campaign had repeated contacts with russian intelligence officials according to the new york times. the paper citing for current and
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former american officials and intercepted calls showed repeated contact with senior russian intelligence officials in the year before the election. it also says the best the internet -- the interception included other aids. forced oil,ld have gas, and mining companies to disclose payments to foreign governments. the rule put u.s. companies at a competitive disadvantage. congress is considering overturning other obama rules including ones that protect water rates from mining and prevent mentally ill people from buying guns. malaysian investigators are continuing to search for clues kimr the sudden death of jong's half-brother. according to reports, he was targeted by two women with that chemical spray and a -- in a shopping concourse. south korea's spy service that
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north korea had been trying for five years to kill him. toshiba shares trading sharply lower again today as future is under question. yesterday saw the conglomerate in its nuclearwn business and its chairman resigned. the company is considering selling majority stake in its profitable memory chip unit. the president saying the sale of the entire unit is now possible. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. can find more stories on the bloomberg at top . let's look at what is going on with asian markets. the main driver of the rally in the region. seen as a run for lenders. we are seeing on the hang seng chinese shares rallying the most in asia over 2%. accounting for seven out of 10
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of the biggest movers there. this afternoon credit rose to a record in china for generally. bank of china leading gains on the hang seng. despite the earlier gains made on the shanghai composite we are seeing shen jin in the red. chinese stocks down .1 of percent. it has been a day for chinese shares, not quite sure that is the case. we have seen this decline in the last hour in the market. while we are seeing a broadly positive picture for indian banks, not so much the case, weighing on the sensex. this on reports that the government plans to trim how much capital it comes to the state of lenders because of slowing loans growth. over 1%.ikkei 225 up as the end falls for a third day against the dollar. we have tnd holdings jumping given their solid results and
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the last word on toshiba, shares have been dropping here today. the company is said to request an extension of loans through the end of march. the battle has not ended yet for toshiba. anna: thank you. federal reserve chair janet yellen sees more rate hikes ahead if the economy stays on course. she spoke yesterday on capitol hill. manus: here's what she had to say. i noted in as previous occasions waiting too long to remove accommodations would be unwise. potentially requiring the fomc to eventually raise rates rapidly. which could risk disrupting financial markets and pushing the economy into recession. plansnot know what fiscal congress and the
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administration decide on. we are not basing our judgments about current interest rates on speculation about that. the economy has been making solid progress toward achieving our objectives. the unemployed rate is close to levels we regard as sustainable in the longer run. inflation has moved up and it is those trends that are driving our policy decisions and not speculation about fiscal policy. the fomc has enunciated that it's longer run goal is to shrink our balance sheet to levels consistent with the efficient and effective implementation of monetary policy. yellenwe bring you janet giving testimony at the house financial services committee. you can follow it. point -- 302 302
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.7 billion pounds and her management. she is a woman in a hurry to make sure she's in charge of the hiking cycle, not us but the market is still underpricing, and aggressive fed. guest: they have been right to do that over the last three or four years. that has been the direction of travel, expectations are higher. i think it is right, markets are absolutely more cautious whenever there has been a difficult decision. has erred on the side of caution. i do not see where we should change our expectations. maybe a little more direct than hard i think it is a possibility, we are expecting to see three rate hikes over the course of the year whether that happens in march, april or may, i do not think it matters too much. it is more the direction of travel. manus: i get the sense that she wants to reassert some kind of independence.
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panic index for you. it is hitting the highs we have not seen since 2014. the question is, do you love american equities enough, does the market, is the market being duped into valuation, is it something we should reconsider markets,of four major made new record highs last night, does that continue, is there enough legs? guest: we are cautious on valuations in the u.s.. u.s. stocks have been trading at a premium for a long time. continued to extend themselves. i suppose there are. a lot of reasons to be enthusiastic about u.s. equities. domestic outlook looks robust. we have a relatively modest out look on interest rates and the outlook for global growth is good today as it has been for quite a long time, i would say. anna: what is that outlook on
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interest rates look like? larry fink says i am pretty confused in terms of how high the interest rates go. you have got this contrast between the structural story where lower interest rates are to be expected because of aging populations and technological changes. stimulus andfiscal investors are preparing with protection against inflation. guest: i do not think we know it this stage. the structural story sound sensible. at maybe we will move into world which becomes a little bit more normal at some time that once the tension starts in the economy, once we start seeing inflation taking hold we will see the rest of the world growing at a decent rate. and maybe change that get put on the back burner where we think about things in a more normal way. anna: they keep a lid on how high rates go in the cycle. they: over the long time
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do. people will be able to discard is relatively quickly when we see other pressures of all. it seems to be, it is flat -- is flatlining affair were to put on that, what needs to happen in your opinion to recharge the reflation believe? set up inis a broader investor confidence. continuing to see labor market and seeing wage growth develop, and seeing trends develop more globally. when we start to see strengthen economy, we are starting to see the signs of life in the european economy on a sustainable basis since the financial crisis. those are things that can contribute to tightening the supply of goods and services and capital which will drive rates higher over the medium-term. anna: you mentioned the chinese
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economy and you mentioned rockets were right to under expect from the fed this year. when we look back on what has happened on years go by, the fed has found itself taken aback by global developments and i has been one reason they have had to push back on earlier expectations on rate hikes. any chance of that now and if it -- would bes that china or something around that? >> maybe the dynamics shifted fed looks internally and sees the risks sitting right next to it in the white house right now and saying if we do not get ahead of this in terms of what we are doing on monetary policy than the fiscal policy may overwhelm what we are trying to do here. pressures have been relatively benign, they have been able to make some relatively easy calls. that might change if we start to see fiscal stimulus coming through in the u.s. and the result will be a little more ambition to get ahead of the game. the new long data was
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quite staggering, wasn't it? it is hard to square the thing away. canada wants to reduce levels and pair the shadow banking and here we are with new loans ratcheting to a one-year high. the fed on tightening mode, china on tightening mode, joined those two together for me in terms of risk. guest: china has been doing the opposite where it wants to cool down certain areas of the economy. every time it looks like it is over, it swings back the other way. they have got to manage their issues and the way the u.s. has to manage there. -- there is. neither side is ready to make difficult decisions and they have defaulted when that has been required. we are still seeing the benefits rolling to the chinese economy at the moment. anna: thank you very much. with us here on daybreak europe. manus: 8:30 a.m. u.k. time. making the first policy decision of the year. we get the jobs and wages data
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in the u.k. still -- we get inflation numbers. facing resistance within his party. we look at the election, the political risk in europe and the place for markets. this is bloomberg. ♪
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anna: welcome back, everybody. in berlin this morning at 8:18 a.m. in the morning and 718 in london. of 5.72.r at one making gains in the back of janet yellen's statement yesterday and expectations in interest rates. kind of flat on the dollar indices, more broadly. by .3 of 1%. up oil slightly lower this morning but for major u.s. equity indices built out their record
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highs yesterday. that is what is driving the market. zinn china and are one-year high. america rallied for the sixth day in a row, the longest advances before christmas. citigroup said that is transferring into our european equity markets. janet yellen gave us confidence in the economy but the rest of guidance in terms of timing for the rate hike. anna: the question is whether the market is still live. -- if march is still alive. let's get a bloomberg business flash. here is sophie kamaruddin. reporting a 23% increase in fourth-quarter profits, the state-controlled dutch lender said underlying net income which strips out one-time items rose to 333 million euros. that was helped by higher net interest income and lower divisions set alone -- aside for
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risky loans. and posting a slump in fourth-quarter profits, net income dropped to 291 million euros after a write-down at its french consumer banking unit and trading revenue fell. that compares with the 315 million euro analyst estimates. credit agricole's deputy ceo will be joining bloomberg for an exclusive interview at 10 past eight u.k. time. softbank is buying alternative asset management fortress investment group for $3.3 billion in cash. -- they have agreed to continue leading the business which will remain based in new york. fortress will operate independently with in softbank even as the japanese country as company establishes its own technology investment fund. goldman sachs did not pay 2016 bonuses to about 100 bankers who had advised on takeovers and underwrite security officer -- offerings. they said the move is more akoni
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and then in past years but many dealmakers who failed to impress their bosses still got something. the company's shares closed at a record high yesterday amid optimism for a positive economic and regulatory environment under the trump administration. general motors shares closed the most 5% higher in yesterday's new york trading. that is after lumbar curve field that psa group is exploring and acquisition of the carmakers european business. according to a person familiar with the matter, gm is seeking a multibillion dollar amount for opel which operates u.k. sister brand mobile. ares: the french elections tightening up for the presidential contenders. he is facing resistance in his party. that comes after a scandal surfaced. anna: according to lee figaro, fellow republicans have been reluctant to set up campaign
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events for the candidate. he told top party members that he is withdrawing from the election that created a major crisis. let's talk about political risk and what it means to investors. let's talk about political risk. we have, manus has been looking at this chart that shows the cost of protecting yourself in france. the five year high. anna: is this around the french election or you're not expecting a big change for have to be careful? guest: the dynamics so far, it would be wise to be a little bit cautious. i guess we have seen every single time we have had some kind of popular referendum or election over the last couple of years, we have seen outcomes that have been challenges to the status quo. that is wise to be cautious and that might happen again here in france. wass: one piece of news
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natixis is being investigated in france, going back to some subprime issues back in 2007. natixis is saying we have to specific incidents of where this relates to information and so going back all the way back and creditr is up agricole, that was a slight miss but profit dropped on a goodwill charge. the word is not going to be an -- world is not going to be an even place after donald trump gets his hands on legislation. guest: when you look at how well a lot of when you look at how wl a lot of european banks have done over the last through four months there is a lot of expectation that is being built into those share price recoveries. i am not necessarily sure that when you look at the fundamentals that really reflects area and we have seen higher u.s. interest rates. european banks do not have a lot of exposure to that. we have seen long bonds move up we have seen an opportunity for big diversions in short-term rates that would be really positive for european banks.
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it has been a sentiment-based trade and maybe an element of valuations that were very low and moving up to more except will levels. perhaps reflects the fact that the european economy is looking a bit healthier and investors are generally feeling bolder about the world. they talked about net interest income going up. margins are going up, going up because they see a little bit of loan grows. investors are looking more toward margins and we are not seeing that coming through yet. anna: we're seeing recovery in the european bank that is -- banks are helping banks like abn. guest: maybe we have seen the term beginning to unwind some of their stimulus. we may be picked a bottom for interest rates in europe. we have fixed the bottom and we are going to have a term that looks attractive for making money and banking. manus: this is the earnings function on the stoxx 600, the current season. it can see very clearly when you
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look at it, the defensive plays are off. cyclical plays, you have technology and basic resources both doing really quite well. relative to the rest. that is on the earnings surprises. perhaps a little bit of a moot in terms of the sales surprises but these are the earnings surprises. what is it telling you, does it confirmed the abn amro's story, what does it tell us? guest: we came in expecting this to be the first year for -- we are seeing sustainable earnings growth in european equities. we start with 10% earnings growth and finish at minus five. the has been the story for a long time. we are hoping this year will be the first year that we start to make progress and that will be driven by an a number of things. we will see some robust banking earnings this year. favorableing a more overall environment and better
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environment for commodities and companies will be benefiting form more favorable fx rates. it is a decent backdrop for earnings. anna: we are getting numbers from anglo-american platinum. doing some m&a or selling part of their business. the holding company for a group of companies that operate platinum mines and the union to see under resources. 6 billion rand, the maximum consideration receiving 6.4 billion rand. they were declaring a dividend for 2016. giving us their numbers as well. rent loss pernd share a year ago. manus: that is another division at from the net income of 632 down from 12.4 billion. then richie there, the senior mr. -- management investor. futures a little bit better bid. anna: the european open is up
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next. they will be talking to a number theeos that stay with heineken and banking conversation. this is bloomberg. ♪
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♪ europeanre watching markets. the first trade of the cash session coming up. i am guy johnson, i in london. matt miller is in berlin. what are we watching this morning? why wait? the federal reserve chair says she does not need to hold off on hiking rates because of lack of clarity from president trump's economic team. do 1:30 p.m.n data the u.s. treasury secretary and philip


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