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tv   Bloomberg Daybreak Europe  Bloomberg  February 8, 2018 1:00am-2:30am EST

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anna: good morning from london, on anna edwards. this is "bloomberg daybreak: europe." direction. asian stocks and u.s. futures point higher as investors are set. this week's market turmoil, global central rank action. the bank of england decision is today. giant is incom talks for a deal that could be valued at more than $10 billion. bankrance's second-biggest bucks expectations for loss, posting net income of 69 million euros. we speak to the ceo.
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>> it's a very modest decline. all in all, when i look at the full year, we have done better. we are gaining market share. ♪ anna: a warm welcome to the program, this is "bloomberg daybreak: europe." in the london, 7:00 land. we go there in terms of the results we get first this morning. fourth-quarter net income coming in ahead of estimates, 801 million euros is the number on the bloomberg right now. the estimate was for 569.6 million. the company has been cutting costs and has sweeping
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restructuring plans. the focus is really on that restructuring progress and what they are doing there. also on their dividend plan. they're telling us for your dividend will be 0.32 euro. the focus, the comparison with ,ts rooftop -- with its rival will become italy's largest company. credit has at union his plan in his sights. on watching for an update nonperforming loans, a focus for this is this as well. let's stick with the banking sector, commerzbank has their numbers hitting the bloomberg as we speak. for her operating profit coming in at 159 million euros. profit.our operating the net income for the fourth quarter, 90 million. the comparison with estimates
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compiled by the company, 64 million. fourth-quarter net income 90 million euros versus an estimate of 64 million. giving us all kinds of updates around provision for loan losses. 251 million euros. bankinga fascinating story. another turnaround story, looking for confirmation of how that turnaround is going and comparisons with deutsche bank also in the mix. deutsche bank posting their third consecutive full-year loss. interesting to see the net income for the fourth quarter coming through from the business over at commerzbank. the cfo joins us for an exclusive interview at 11:00 a.m. u.k. time. we will get a lot more earnings and we will bring those to you
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as we get them. let's talk about what's going on in the markets. it has been another fascinating 24 hours. sayssci's asia-pacific 4.6% higher, futures have been all over the place. they were negative, then firmly positive, now they are working back down toward the flatline. not getting a great deal of direction from the u.s. futures right now. with fluctuated much of the day, then saw a big selloff or a high-volume sell down toward the last 50 minutes of the trading day. than this time yesterday. we demand at a bond auction -- week demand making investors nervous. to what extent can foreign investors be more back into treasury markets, that's one of the big questions.
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continuing to get developments to you as we bounce a little higher on the asian session. let's cross over to frankfurt. at the banking series conference which takes place there, lots of conversation there to have today. who will you be speaking to? manus: we have a raft of the big guns out today. they'll be gathering, robert kaplan spoke yesterday. us -- if you joins think back to what the soothsayers have been saying from the fed, evans yesterday they outside moves on small data points, the market can be healthy, if there was an excessive buildup. other calling the moment a
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little bit too early? the leaders said i don't want to say it's too high, talking about markets. they did not show up to buy tenure paper last night. there is a 30 year paper auction this evening. yes, you have a debt ceiling deal. you still have a huge amount of supply coming to the market. this is timely moment to have the fed, the former bundesbank head and the chair of ubs and goldman sachs. what a cacophony of voices. anna: fascinating to hear what they have to say that demand for treasuries and the inflation conversation. also regulation is a comment you will -- the topic you get their thoughts on. >> i thought about you last night when i watched the winkle bitcoinns talking about and it has a long way to go to catch up with gold. we will talk about regulations.
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through the meyer of basel and what happens next in united states of america, it's a 30 minute conversation. they could have come down heavier with the ruling, but it could have been a sledgehammer and it simply was not. bitcoin just never fades from the news belt. anna: manus cranny all over the regulation story an important market developments from there in frank for. that's get the first word news update with juliette saly. juliette: societe generale has been estimates with estimates of 69 million euros. it had been expected to post 180 million euros. ceoif lucid theory, the said he is upbeat about the investment bank. all, it's a modest
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decline in a low volatility environment. banks whichh the already have these figures, we are doing better. we are beating market share. juliette: u.s. senate leaders have announced a bipartisan to your budget agreement that would provide $300 billion in additional funding. the plan would suspend the federal debt ceiling until march 2019 and provide almost $90 billion in hurricane and wildfire disaster eight. senate vote is expected today, followed by the house. the dollar rose after news on the deal. senior white house aides had heard of domestic violence allegations against president trump's staff secretary before the publication of reports that led to his resignation, according to people familiar with the matter. it was not clear who knew of
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porter's history with his ex-wife's or how much they knew. two officials said trump himself was a -- unaware of the allegations before the white house was approached by the u.k. daily mail. china's overseas shipments have held up despite the strong you want and rising trade tensions with the u.s.. import growth surged reflecting calendar effective exports rose by 11.1% in january from your earlier while imports increased 36.9%. at that the trade surplus of billions. global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. find more stories on the volatile at top in the asian markets but supportive coming through japan. the nikkei on the close of by 1.1%. and a solid session in india today. weakness in the large-cap stocks
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china for third consecutive section and the chinese shares listed hong kong set for a correction, down 10% from its peak. terms of other stocks we been watching, when macau rising as the chairman steve wynn resigns. our analyst saying that the ip businesses remain very strong. warning incern offshore drilling contractor and there are concerns. upie profit grew, net income -- quarterly profit grew, bad loan allowances fell. that's coming through from singapore's biggest tank. juliette saly in singapore
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for us. asian stocks in u.s. futures pointing higher, investors assess the invocations of the recent market turmoil. joining us is the coat cio of cap corn fund managers. good to have you on the program this morning. let's talk about what we've seen in markets since the start of this week. have a con down sufficiently to get your toe back into global equities? do they go higher from here? >> i think we've had this correction while ago. it was building up within the system and we saw that 6% move in the dow that shocked the markets. the vix going up. now we are in a stabilization phase and people are questioning are all the consensus trades the right trade. bonds are at the edge. periodin a stabilization , but i'm not sure we are out of
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the woods because things are so on edge. anna: and how much of an inflation threat there is out there. i have this chart underlining the selloff we have seen in global indices. us msci world index showing -- in the blue moving lower. do you think we are under or over pricing the extent to which central banks will the new there liquidity and qe programs from the markets this year? >> we are pricing in the uncertainty. we are not exactly sure how central bank unwinding will go. sure of the u.s. rate hikes. the market is getting a little ahead of itself, just to be cautious and see where things go. the bond yields are also breaking out and the impact on the markets is to be undefined. and the dollar bull markets may
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reverse of it. we see in the news out of china today, things like that may lead to a contagion in the fx market that we have not seen yet. most of the volatility has been in equities. anna: one of our colleagues has written a great story about how foreign investors might receive the increased supply treasuries that we are expecting to see this year. there were signs of nervousness around us yesterday with the auction of treasuries not met with demand that some had anticipated. some suggest foreign buyers might be more hesitant to participate in treasury auctions because the cost of hedging exposure is increasing because of geopolitics and concerns about trade. that poses threats to other assets such as treasuries.
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>> you're at the level where if you break through, everyone is like, we don't really know what is going to happen. if you're in that consensus camp of the short the u.s. dollar, what would you want to be long at this point? everyone should just hit pause at the moment. like the s&p, for example, it is just gyrating because no one wants to make a firm commitment in either direction. anna: when you look back at what started all of this on friday, better than expected wage growth. there are many reasons to be cheerful about the state of the u.s. and the global economy at the moment. press pause for now, do we not come back to those positives at the end of the day? level, icertain of the think 10% or 15% is healthy. strong,amentals are
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currencies of says it. anna: i guess will stay with us on the program. coming up, societe generale just reported full-year earnings. we have an exclusive interview with the bank cfo. later in the show, softbank's with three talks. they could buy a stake in the reinsurance giant. they are having conversations about it. we will bring you the very latest. this is bloomberg. ♪
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anna: this is "bloomberg daybreak: europe." let's get the bloomberg business flash with juliette saly.
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zürich insurance group delivers its first increase since 2011. they raise dividends by 6% after signaling high interest to payouts in november. the company announced a share buyback of roughly a billion dollars. zürich insurance ceo mario greco joins us at 7:00 a.m. u.k. time. back to you. anna: thank you very much, a brief business flash. many of corporate headlines. mario greco will join us later on and we will cast lead to get his thoughts on dividend policy that business and the profitability of the company. france's second-largest inner has beaten estimates with net income of 69 million euros. it was expected to post a loss of 180 million euros. the company saw a surprise
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comeback for the equities trading business in the final three months of the year. ceo discussed his company's earnings and future prospects. ,> first of all, fourth-quarter a very modest decline. still low volatility environment. compared with the banks that have already posted figures, we are doing better. we are gaining market share. markets, weat the are getting out of these extraordinary monetary policies would probably also meant no volatility, and a lot of money available. i'm very confident with the capacity to deliver sustainable growth and profitable growth.
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grexit you expect the volatility to really benefit socgen for 2018. >> more conviction buy investors, more lows. so yes, i am positive overall. we have good growth prospects in particular in europe. -- and thes of hastal market is -- historically low volatility. reach somens you may of your target quicker than expected. >> the targets not just depend on the environment. we released targets three months ago.
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>> has socgen been structured on selling some of these products linked to volatility index that have been collapsing over the past few days? >> know, we do not have to suffer those kind of consequences. >> looking at revenues last year, they were under pressure. does that mean somehow you want to compensate with a bigger bonus pool? is it going to be stabilizing or increasing? is -- wills pool actually go down, in line with pretty good in relative terms, finances. responsible in terms or people look at the potential of the group, they look at our ambition and no we want to invest.
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are positive for our capital market and our wholesale activities. anna: that was the societe generale ceo in paris. in germany, angela merkel finally has a coalition agreement following four months of negotiations. she had handed key cabinet posts to the sdc. us.guest is still with i put together some of the themes we've just been talking and hearing about. starting with the banking sector, societe generale talking about how they might benefit from a little more allah tillie in 2018. this is something you expect other banks to latch onto it for over the volatility of the earlier part of the week? slightly more volatile picture ahead would be good for some of these banks in europe? >> it would be positive.
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as we've seen in the last few days, we've seen a mixture of been futures market and active like markets as people try to figure out where things are. when you have a two way that and more a symmetry in the market, that's when you start to earn the value added the. anna: the political situation in germany is interesting as well. on assetsve a bearing you are watching in the eurozone? a bearingy will have on financial policy out of germany, but in terms of shaping the eurozone, what emmanuel macron wants to do with the eurozone, is this material for you? >> when you have the largest country in eurozone i having its coalition, is not a positive thing, is it?
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it's good in terms of's shoring up expectations because you have less parties to deal with. it is a material positive at this moment even know you seen some ships in the makeup. anna: what about acting on an exit plan? we've had commentary coming from germany and we've seen wage deals being struck in germany, striking an aggressive wage deal. how does that play against the strength of the euro and all the other things that go into making up eurozone inflation? >> its 100 basis points and tightening already. bet's something that has to taken into account. while we are seeing synchronize growth and return inflation, it might be more than people think in terms of the whole exit policy. in the u.s. with weak tiller -- with the weak dollar, you have poor impulse coming through. the market is getting a little
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ahead of itself thinking the ecb is going to tighten. first part of the year we will see where things are and then lay out our cap. anna: there was speculation that we will see the ecb try to talk down the euro if they believe the u.s. administration tried to talk down the greenback and they could come out and do something similar. >> it's all about competitiveness at the moment. we've seen china with export numbers, it might be a bit weaker. it's a competitive devaluation that we've seen. everyone wants to have the export competitiveness this back. saying it makes them raise their eyebrows. next, what should we expect from mark carney on monetary policy and inflation?
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to what extent is he going to talk about the pound and the recent strength in the pound against the dollar? how much is that easing inflation pressures in the united kingdom? that's part of the conversation. this is bloomberg. ♪
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anna: this is "bloomberg daybreak: europe." in tokyo, the dollar against the yen, the move around .3%. that's get back to europe with breaking news coming through fast this morning. paris for breaking news, the focus on the margin and the growth guidance. interesting commentary coming through, fully near daschle your revenue looks to be in line with estimates. interesting in terms of expectations for this year and their backward looking numbers as well. the advertising company has been
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in a wide restructuring phase of us strengthening assets in technology and data. 2017 was a tough year for the entire sector. it to face a lot more competition, cutbacks among major clients because of sluggish economic growth and also changing technology. all that adding to the mix for the relatively new ceo. he took over after the long time ceo stepped away last year in june. an interesting development there terms of guidance the rest of the year. pis talk about per node -- ernod, another strength business in the drinks industry. exactly in line with estimates. first cap profits exactly line with estimates. goal of 4%-6%nce
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increase. they own absolute bock a and b peter jin. own absolutthey vodka and beefeater gin. updates the crucial chinese market there. let's get a check on the broader markets with guy johnson. x the first column is what is happening on the gmm with the chinese currency, a big move. paid teaching to this, folks. attention to this, folks. leads into water movement in asia on the currencies. the main fact, the trade data, the narrower trade story we've
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seen coming out of china this morning. pay attention to what is happening with the chinese renminbi. dominating all of that this morning. the other column is what is happening with the equities. the ftse 100 up nearly 2%. let's talk about what we can expect this morning when markets open here in europe. it cap collates into a fair value story on the bloomberg. down around .7%. of nearly 2% yesterday, down by .7% this morning. u.s. markets lower at this stage much, just aby little bit, but pay attention to that story. anna: let's get an update on what were expecting from the bank of england. what are we expecting?
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you have a guest who knows a thing or two about u.k. gilt markets. let's get his thoughts. super thursday so we will get the rate decision along with the quarterly inflation report from the bank of england and mark carney later. no changes expected to rates today but it will be more about the forward guidance. i'm joined by the ubs strategist, john, great to have you with us. what are expecting from the decisions at the conference? >> the decision and the vote are stayingo confirm thing as they are for now. there's an -- a lot to reflect on, the updated fiscal forecasts, progress on phase one of the brexit negotiations. there has been plenty of data , so there's agdp lot to put into perspective today. >> not least of all market pricing.
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probability of a hike in may standing at around 50%. it was higher. is mark carney likely to push back against that? >> we don't think so. that's come from the general move in bond market to an extent. think they will be content to see where the market is. there's a lot to happen between now and may, particularly around the brexit negotiation. to push back to much on market pricing risks closing the door off to them. if things go well between now and then, there's a good chance a mate hike. think they would like to see things state be much where they are. >> so balanced view coming out of the conference. >> there has been a lot of data that has been mixed, in truth. the fourth quarter was a bit stronger than they anticipated, it seems. example, missed to
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the downside, for example. at this point they will want to be careful. >> you say the bank of england will hike in may but you make that explicitly conditional on the u.k. getting this transition deal from the u.k. by the end of march. tell us a bit of i'll -- a bit about that. >> banks a said repeatedly the uncertainty is one the key determinants of our we have from here, certainly in terms of investment decisions being taken, how companies behave over the coming time is dealing to clarity around brexit. we think we will get a pickup in investment and improvement in sentiment, what growth still holding up ok, that will give in the opportunity to hike. there are a lot of risks around this transitional deal. there is still a lot to be decided.
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as well as uncertainty of the negotiations himself. march,gs come together companies may start making decisions that hurt economic growth to the u.k., in which case we think the bank will want to keep policy support and not hike in may. whether's a question of they will hike in may or whether they should, do you think they should? >> we don't, actually. the data is mixed but still not enough evidence that wage acceleration -- wage inflation .s excelling if wages don't pickup, consumers will struggle even more than that already are. if you look at retail sales and consumer confidence, there is plenty of evidence that consumers are finding life difficult. over the next year or two, for us with all these uncertainties
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around brexit what's going on in the economy, we think monetary policy would be best staying as accommodative as possible. >> mark carney do has to give a speech, what sort of inflation will they be dealing with this year, given that we've seen starting have its best start to the year ever in january? inflation has been accelerating at least until recently. they've said and we agree it's down to the weakness of starting over the referendum in the months before and after that. as we get further way, we're seeing inflation reflect fundamentals. time will tell how strong our week -- how strong or weak it is. there isn't anything to worry about in terms of to mystically
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generated inflation. -- in terms of domestically generated inflation. you should see inflation come down swiftly toward the target. with the previous volatility of sterling, it falls out of the year on year calculations. it should become clearer what they are dealing with. >> it was seen as a dovish hike in december. we saw sterling drop more than 1%. today, are the risk more to the downside for sterling and guilt -- and gilt? quest there was a lot of optimism about tax cuts in the u.s. and general feeling of central banks starting to move more quickly toward policy normalization. the u.k. front in and starting have been anticipating that. fore is perhaps scope
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sterling to moderate a little bit today and front in yields to settle down or come up a little and then were back to data watching and seeing how brexit negotiations go. >> thank you so much. we are about six hours away from that decision with mark carney's press conference coming 30 minutes later. thank you for those updates coming from the bank of england. i guest is still with us. sterling gaining since november, the bank of england pound effective exchange rate index. reflecting cable because that would be too narrow a look at this currency given who we trade with. , we've seenresting a little bit of strength coming back into sterling. selling looks a little stronger.
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this is helpful, as we just heard from the bank of england. that's exactly. removing away from the sterling weakness. that eases some of the inflationary impacts. you seen the weak dollar coming through and a little bit of strength against the euro as well. in this environment, we have an exceeded inflation expectations by this much and you don't really want to rock the boat that much if you are the central bank. anna: do you think they are moving toward a hike in may? where how they might try to keep their options open for may. we have a lot to learn about underlying inflation trends between now and then. >> several key their options open because you are at a key point in global fx markets whereby if the dollar bear market continues, that takes a lot of pressure off. if you see a reversal, it is the inverse of that.
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this is the time whereby going back into the area where you will have the vote on brexit, the uncertainty will accelerate your the summer dramatically. if you are a company, you cannot commit beyond here. where the stress will increase, i think. anna: u.k. consumer strength in the hands of the mighty greenback. as we were saying, we will bring all the latest developments from the bank of england and the inflation report at 12:00 p.m. u.k. time. i half hour later, we will hear from the governor, mark carney. what will he say about the strength of the pound and market expectations of rate hikes? oning up, china's trade data exports held up despite the stronger you want and rising trade tension with the united states. we will have analysis of the
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data in the strength of the import story is interesting. that's next. this is bloomberg. ♪
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morning, "bloomberg daybreak: europe." it's early in the morning, 1:46 over in new york. futures higher, up .2%. we've been all over the place .ith u.s. futures negative territory and then into positive. drop down to the flatlined, now back in positive territory. china's overseas shipments held up in january despite the stronger you want and rising trade tensions with the u.s. all income growth smashed through estimates. imports increased yearly 37%.
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black who to jeff joins us now. good to have you on the program. what do these numbers say about global trade? let's start with the big picture. >> good afternoon. there's nothing in the trade report that would contradict the story we've been having for quite some time about a strong synchronized global upswing in trade and output. on the chinese side, that's true for both imports and exports. the exports were accelerated in dollar terms but also imports, even know there are seasonal factors that are strong, oil imports rose to a record. anna: that says a lot about the strength of domestic man. the big jump in imports, how much is that a reflection of policy changes by the administration, or does it reflect underlying increased consumption by the chinese?
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>> it's difficult to break this down very precisely at the moment but we can see that there are some seasonal effects here. the chinese new year when pretty much the whole country shuts down for two weeks. that was earlier last year, so there are some basic effects going on. the sustained rebound into my prices, i mentioned oil, that has contributed strongly. while the 30% number looks like busting, it is strong, but not quite that strong. analysis,ks for the jeff black, joining us from hong kong with the latest on the chinese growth story. our guest is still with us. thoughts on chinese growth and to what extent we are beholden to chinese growth for the underpinnings of the global growth story at the moment. will always be a big driver. people have been waiting for to
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slow down for quite some time but it still robust and has gotten to that trough of expectations. this is one reason we've seen such stellar performance in the stock exchanges although now there's a little bit of a wobble and concerned. again, that is coincidence with the chinese new year which always causes strange effects in the market. china exports rising double estimates but imports six times higher than estimates. has a lot to do with commodities and the imports of commodities here. how do you rate the bigger picture story around china? is it to do with the currency and the strength we are seeing in the currency and whether we might see policy action from the chinese. when we see big moves in the you want, that's what people talk about.
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>> today's where you have seen the first little murmurs of that easing of capital outflow restrictions. on massive strengthening level along with a bear market we've seen. a key concern is that we've not seen the volatility in emerging-market currencies we normally see in this. we've seen the equities move but we have not seen be the -- we have not seen the currencies move. they have been sanguine. anna: we did start to see a little bit of demand for safe havens. the yen, there's little bit of flow into the yen. and the governor speaking at the boj, talking about the extent to which they will continue powerful easing persistently. its 2% pricet from target, he goes on to say.
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program,g to that qe as we've heard many times, we have come a long way from the start of this year. we get some yen weakness as result. many were asking how long the boj would be committed to its young targeting and the extent of its program. they keep coming out persistently to tell us how committed they are. next they are ultimately in a bind. they cannot get yields too high but they need them higher than the are now to get things going. they are committed to a broad swath of qe which is more generalized than any other country. they have to keep going in a perpetual motion machine, it seems. anna: will they be able to hang on, as we see the rising tide of interest rates treasury markets? scale.epends on the if you see a poor time rate hike in the u.s., it starts to get
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more stressful in general if you look at the spread. investment grade yields spreads in the u.s. are going to all time lows. we haven't seen any type of shock that would make it too difficult for them at the moment. if we see volatility increasing, that is another story. tenacious, what kind of easing does he want to see in the currency. is he trying to talk down the yen? this has been the japanese policy for a long time. of calm andt time everyone is trying to talk down the currency. the filipino peso is looking week at the moment. city.e chinese want for all the big exporters, they only to have weaker currencies
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at this moment to stimulate that exports growth. anna: did u.s. open the floodgates, everyone else is doing qe anyway, so the u.s. could argue they were on that too. >> i think ultimately the u.s. wants to have a stronger dollar at the moment. the dollar has become we could have to stimulate that u.s. growth if they needed. anna: thank you very much for joining us. japan's softbank could by as much as a third of with three, when the world's largest reinsurers -- the third of swiss re. our reporter from tokyo. good afternoon, what is the
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status of these talks? we saw this confirmed late in the european day yesterday. the movement in the swiss adrs, i think. >> that's right. they cuts in strange deals over the past year, but this is one of the more unusual. yes focus his energy on technology companies in china. he has dabbled in finance in a few different cases, buying fortress last year. re will be anss interesting deal. invested intt has insurance companies for the cash flow. you get a lot of people paying insurance premiums that you can use for a variety of investments that have strong returns. there are some precedents for this, but if he were to buy a third of the company as sources have told us, it would not have
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direct access to that cash, but there may be alternative ways to use the strong balance sheets to make investments. anna: you mentioned some of the reasons he might want to access an insurance company cash flow .eems to be, popular how does this fit with the other investments the company has? you keep calling it a telecom business, but it is very diversified. beyondas expanded well telecom at this point. softbank reported earnings yesterday, talking about spinning out the japanese telephone business to distinguish itself from that business that has become synonymous with its name. billionas set up a $100 investment fund and has been cutting deals with startups around the world and financial and other assets. this would fit into what he was talking about yesterday he wants
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to create a group of companies in a wide range of industries, especially leaders around the world, so he will have a diversified portfolio that will go beyond softbank itself. anna: thank you very much for the update, peter, from tokyo with the latest on that deal. fascinating to watch for any moves we get in the swiss reinsurance sector as a result of that. we will talk about swiss insurance when we talk back. -- when we come back. ofwill hear from the ceo zürich insurance group as it delivers on a dividend pledge. lots of headlines coming through from the company this morning. they said they are well on track to meet their 2017-2019 goals. full-year net income look to be a touch above estimates. that could go down well with investors.
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anna by back of shares of about a billion dollars and giving clarity on their dividends. lot to talk about with mario greco. this is bloomberg. ♪ we use our phones and computers the same way these days.
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anna: i am anna edwards. these are today's top stories. looking for direction. asian stocks and u.s. futures point higher as investors face action.and central-bank the bank of england decision is today. to buyk is in talks swiss re. lostxpectations for a posting net income of 59 million euros. we speak to the ceo. >> when i look at the future at 's,st compared with the bank
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have been doing better. we are gaining market share. ♪ anna: good morning. it has gone 7:00 a.m. in london and 8:00 a.m. in france and totale giving us their earnings. let's get to the french oil giant. u.s.rofit 2.8 7 billion dollars. of $2.5e estimates billion. they are playing -- planning a share buyback. this is interesting because the focus going into these numbers was around the script dividend and how they would tackle any dilution of the shareholders were going to suffer as a result of the script to dividend. in 2015 they enabled shareholders to accept dividends in shares instead of cash and
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that had the diluting effect. the shareholders were asking about how they would be compensated for that and as a result, fascinating we see that. they are proposing a dividend of 2.48 euros per share. andg focus on the dividend buyback. that is the focus here. also how they have managed to capture higher oil prices. the likes of bp did well. the rest of the sector was not greeted so well. that's get onto the futures. what we are expecting to see for european equity markets. monday of earnings coming. individual names could be on the , stillat the big picture recovering from the twists and turns of the earlier part of this week. in selloff on equities in -- equities on monday. we will keep an eye on futures. u.s. futures have been pointing positively for the past -- much of this morning but that reflects a move downward.
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we need to factor in the last 15 minutes of u.s. trade and to where we are on european equity markets. that is what we see futures a little bit weaker. let's put up the risk radar. where it has been in the asian session. volatility in the futures picture. they are pointing higher. asian equities also moving higher up by .3 of 1%. that helped move things higher. and on the inflation story. manus cranny will be speaking to a host of fed names and we will hear from other fed voices about inflation, rate hikes and how quickly they will come in the u.s. we have the u.s. 10 year yield at 2.83%. much higher than it was this time yesterday. a bit of disappointment around that treasury auction. let's get a update. here's juliette saly. juliette: societe generale has
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been estimates. it had been expected to post a lot -- post a million euros. a beat about the investment bank. better than our peers. it was a modest decline. at the future compared with the banks we have done better. we are gaining market share. u.s. senate leaders have announced an agreement that would provide additional funding suspending the federal debt ceiling until march 2019 and provide $19 billion in hurricane and throw -- wildfire disaster aid. the dollar is on the news about the deal as did yields.
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china's overseas shipments have held up despite the strong yuan and rising tensions with the u.s. and import growth surged. rose byr terms, exports 11.1% from a year earlier. leaving arease trade surplus. official sayssh china is wary of providing any trade commitment until it sees how brexit plays out. then exclusive interview trade commissioner said the u.k. hopes to negotiate a neil -- a new deal with beijing during the implication time through march 19 -- 2019. >> they recognize -- we will be able to implement any agreement.
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and with the launch of the second chapter they clearly endorsed by both sides. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. anna: the first increase since 2011. switzerland's biggest insurer rate dividends by 6% to 18 swiss francs a share after signaling higher investor payment -- payouts in november. let's bring in the ceo. great to have you on the program. you miss your rationale for increasing dividends and the share buyback. what is the rationale behind the buyback this morning?
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guest: good morning. stand tod a considerations. we found in 2017 and externally strong year for us. profits grew and they grew steadily and all the aspects of our business. at more importantly, we look 2018, 2019 and what we represented to the board is we are confident that business growth and -- would continue in 18 and 19. this is what moved us to propose to the board increasing dividends and this is what the and confidence in the future is the most important element. anna: what is it that gives you confidence? guest: the business is on alling and growing
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different aspects. the premiums are growing back again. in property and casualty. we have nice strong growth in life. it is improving on customers. the possibility is coming up as we expected and it is strong because of its improvement. costs are coming down. we committed to 1.5 billion and we achieved half of it by the end of 17. anna: is on the cost side and on the pricing side, that sounds promising. if 18, is that the new floor for the dividend, high -- how high can that be pushed given the positive backdrop you just painted? guest: yes it is. ofn we announced in november 2016 we conceded the dividend
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for that in case we would raise it, the new dividend would come -- become the new four. it was 17 before. now it is 18 and we are confident that we would be able to move it further. anna: given the positives you have pointed out on cost and pricing the combined ratio still above 100. what is the explanation and how quickly does that get better? guest: [indiscernible] because of the impact of the event in the u.s. in three weeks. flatund the ratio is around 98. and we are confident [indiscernible] in 18 and 19 as we promised and as we expect that to do. what we see is an improvement. one percentage point in the loss
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and that 2017 business is promising for us going forward. and a: are you able to deliver that you are able to -- are you surprised that you're able to deliver buyback in a year that has been so tough because of the natural disasters? does that surprise you? guest: i am not surprised. we have been working hard to achieve that and there is a lot of work. i am very pleased. i am not surprised. this is what we wanted. we have been struggling hard to achieve it and is a great testimony to the work done by the colleagues that we are able to report on these numbers. anna: you started a restructuring plan. how far through that are you,
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what lies ahead? guest: we want to be reliable. and so we are progressing steadily on every target we announced. our ambition is to exceed the targets. investord of 17, shareholders can see we are focused with discipline in doing what we promised to do. we are going pretty fast. started at thewe end of 16, we would think of getting where we are today that we were not sure. so we're pleased to see we are progressing fast and well in our plans. anna: is there more to do on the jobs side, well -- will there be
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more jobs to go adds eric? about jobis not casts, insurance is in a complete revolution and the revolution is customer lead and it is about the expectation of the customers. this has an impact in what we do , on the services we provide and inare engaged with that providing the services with the customers with the best possible scheme. it is how we work and how we serve the customers. a: we have seen a lot of insurance companies investing in technology. you have been investing in bright box. how quickly does this shape how you deal with customers, how
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quickly is the revolution changing a relationship to your customers? guest: it is going very fast. it is progressing every day and it is moving. which is exciting and it is a great time to be in. aso we also acquired business, it is about providing travel and services support to customers around the world. that is not an insurance business but it is an important component of our relationship with the customers. that together with bright box, with the latest acquisitions we're moving to a different relationship. we saw the impact of this because we saw customer retention going up and loyalty
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moving positively and satisfaction was improving. climate change is a big theme for your business. like lumbar q have got yourself a highly energy-efficient new headquarters as well. in terms of the business, we heard from axa that they wereenw headquarters as well. in terms of the [indiscernible] to what extent are you facing out coverage for parts of the global economy that you do not like because of their impact on the climate? active onextremely theng our contribution to sustainability of this world. one thing we have been ends -- investing strongly in his the -- is the flood insurance. year is creating every many more damages than the other natural catastrophes.
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we have been leading in different places of the world to protect against the consequences of flood insurance and i am proud of what we are doing. maybe we do not have an insurance presence. to get better prepared. investing in on companies which are sustainable and we have been taking measures on industries which are polluting. but we're doing in flood is outstanding. anna: thank you for your time. we appreciate your insights. mario greco joining us there from zurich. we will be live in frank for it at the gic banking series. manus cranny has a host of great guests tuesday to about the
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developments in markets, inflation, treasuries, and beyond. it is super thursday in london. what can we expect year from the bank of england? we will get analysis. this is bloomberg. ♪
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anna: this is bloomberg daybreak. 40 minutes to go until the start of the equity trading day. we had a host of earnings reports for the markets. the oil sector. keep an eye on all of those. coming fast and furious. we had an expectation that we will move lower at the start of trade. we saw selloff at the end of the u.s. trading day.
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positiveuld be more later. we will be a touch higher at the start of the trading day. go to manus cranny. have the chair of the gic, he wears a lot of caps during the day and he is the chief economist. let's get right to it. i have had kaplan and dudley and williams all coming out from the fed telling us this is a blip but are we at a moment of repricing volatility in markets 2018? guest: we are clearly at a moment of that sort and it is early to declare that we are in the clear. it does not mean the fundamentals are bad. the fundamentals are quite good. when we look at the u.s. economy
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and go through the components of gdp, the fundamentals underlying the situation are quite good. that does not mean markets will react in one way or another or overreact. that is ahead of us. manus: it was all about wages. back at the data. you are trading at 3.6% in terms of wage inflation. is this the foothills of renewed wage inflation, do you think we are starting a new trend? guest: the trend may develop somewhat slowly. we have the unemployment rate coming down and while the phillips curve is debatable, there are issues we could talk about. i do nothing you can take unemployment down and not get some affect. we are at that point today. where we have a blip and it is going to continue. manus: secret nice growth is
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something that has come through from a lot of players. we looked at real gdp, it matters to create why? >> when inflation was high nominal gdp was somewhat deceptive. you had 10% growth but it was price. sometimes we do not pay attention to nominal gdp yet that is what is turning because we have turning growth and inflation. started and you gave me some comparison. is hard to say four hikes are off the table. you could call it a gradual place -- pace. the fed wanted to be careful. they wanted to go at a measured pace. that would be an eight hike pace. we are not at half of that measured pace that was considered slow in the past.
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manus: that is the question we put to kaplan when he joins me. let's see what he says when he arrives. the other dynamic you look at is ceo confidence and. make a little bit early to the call. what are the indicators flashing throughdoes that come and into growth? >> we had a number of provisions. relevant fore capital spending. aat we are saying is situation where businesses are viewing this as their window. if you are going to do a plant or by equipment, if you have a plan, even mergers and acquisitions, this is your window to do it. it is hard to see what two years out brings but now is the time. manus: the aspect of jerome
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powell coming into his tenure. many would say this is the markets testing jerome powell. is the risk that if he does not give the greenspan put, is that his kind of swagger? guest: things have to get worse before they -- you get any sort of put from the fed. many people at the central bank want to look at the fundamentals and want to say things are ok and there is a good case in the data it you could go to. have: what growth numbers you penciled in? thet: 3% real, that pulls unemployment rate down to three point 5%. that is a good fundamental base. manus: you said remember the fed is nowhere near the inflation target. the fed funds below the inflation target and that is below the inflation rate. fed funds ratehe
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, we cane inflation rate see where we go from there but that might be 2019 are beyond. manus: if you look at the trade numbers last night they are the worst since 2008. the deficit is wider. that will irk donald trump, that will him old in the trade wars. >> i think so and there is some appetite to take the political capital that has been built up and take it to trade. progress on some nafta and while there are some tariffs coming in the trade wars are not the base case. see what thel conference brings to bear. we have a host of names. about regulation and we have the fed chairman. we will probe deeper and further
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on that. good morning. anna: lots more to come from manus. all of them will be in frankfurt and speaking to bloomberg little bit later on today. a lot more to come from those conversations. we have a host of earnings coming out. we have the zurich insurance numbers that hit earlier and we spoke to the management there are positive story. we were hearing from mario greco. the ability to bring down the combined ratio into the future. lots going on there. fascinating conversation with them. and we were getting the take on because itest thinks is super thursday. and inflation report at 12:00 p.m. will wax -- to what extent will he talk about [indiscernible]
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and bringing inflation back down to earth and whether we can see the fundamental trends in inflation excluding the currency at the moment. that is it for daybreak europe. this is bloomberg. ♪
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guy: you're watching bloomberg markets. this is the european open. i am guy johnson alongside matt miller. he is still in frankfurt. cash trade less than 30 minutes away. as asian markets struggle for direction european futures pointing to a negative open in 30 minutes time. rebounds -- have the rebounds run its course? with the

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