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tv   Bloomberg Daybreak Europe  Bloomberg  February 3, 2017 1:00am-2:31am EST

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first jobsrump's report. as minimum wages spike, could pay numbers. fightsthe bank of japan over control over rising bond yields. anna: switching gears, china raising money market rates. stocks fall on the first trading day after the holiday. maker fileshat app for an ipo seeking the rate of $3 billion. ♪
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anna: warm welcome to bloomberg daybreak. it is the first jobs report under the tenure of the new president. steady as she goes seems to be the consensus from the markets. thenumber is 180,000, below six months number and below the 12 month number. on the nose at 100 80,000. who is hiring? itroll is feeding through that it is the small firms that are hiring. 18% of the small firms are doing the biggest share of the hiring but it will be all about the wages. we are looking for 2.5%. anna: it will be interesting to see the response politically we will get. trumpt extent will donald take credit for the resurgence in the animal spirit and the
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increase in job creation. during the campaign, he was casting doubt on the validity of the unemployment data sticks. saying that a head the unimpressed -- that they hid unemployment. honda is listing their operating profit outlook two ¥75 billion. they are giving their numbers. it is coming in above as to meds. a good set of numbers from honda. but politics and the auto section are never far from each other either. the donald trump to each. the samsung tweets. he has reset the gears on where you want to produce. role that into the risk at radar. this is the bank of japan -- this is its mettle being tested. -- japanese bondage yields
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the threat is the bank of japan down at zero.b's what happened today is the normal operations that came through did not. we saw a spike in yields. was forced topan calm into the market, get of the bonds and get things back under control. anna: disappointed investors. with sawing in the yen as well. japanese assets in the mix. looking at the futures. not showing that many clues as to where we are headed. 12 month interest rate swap in to theup by 3.3%, highest this year. in china, boosting their targets, key benchmarks and tightening policy. they have gone into a slight tightening mode. manus: day one out of the new
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here. they are saying to the market, you may not have the best pmi numbers but that typically would have invoked -- more stimulus. the medium-term lending rate has been reset. marketssetting the expectations of what the pboc might or will deliver. anna: here is shery ahn. : starting with the bank of japan. they offered to buy an unlimited amount of bonds at a fixed rate in an unscheduled operation to reassert control over surging yields. they will buy five-year and 10 year securities from the secondary market. it is offering to buy the benchmark 10 year note to add 0.11 percent. the move comes after an earlier attempt friday morning to cap yields. trump's administration
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plans new sanctions on iran. according to two people familiar with the plan. they are punishing tear ran for sponsoring terrorism and testing ballistic missiles. as many as 17 entities may face sanctions. those donald trump and mike is on noticed iran since the missile test last weekend. james mattis reassured allies in asia that the u.s. would protect them against any nuclear attack from north korea. on his first overseas trip to south korea and japan as a top defense official, he says the trump administration is committed to expanding defense ties into the northeast asian nations. any attack on the united states or our allies will be defeated and any use of nuclear weapons will be met with a response. shery: steve feinberg is in
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discussions to join donald trump and a senior role. boost another private equity executive to the top ranks alongside the president. in a letter to the investors, thefirm and ceo told administration he was willing to take a senior position. china's central bank has tightened monetary policy by raising the interest rates and charges. just as cash demand is expected to ease after the week long lunar new year holiday. the pboc raised the cost of 7, 14, -- why 10 basis points each. ceo is stepping down from president trump's economic
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advisory council after criticism from customers and drivers. as participation prompted backlash on social media after drums ticket order on administration. employees, he said immigration is vital to the u.s. and his company and that remaining on the council would get in the way for advocating for just change on immigration. global news 24 hours a day powered by our 2600 journalists and analysts in more than 120 countries. can find more stories on the bloomberg at top . i am shery ahn and this is bloomberg. manus: thank you. let us get into these markets a little bit more. dollar-yen. in the jgb. sophie is standing by. you hit it on the nail. with sign. i want to pick up -- whipsawing. we are seeing a drag on asian currencies.
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the offshore yuan among the biggest decliners although on chair -- onshore rates are rising. the chinese, we got pmi coming in softer than expected. the aussie snapping a five-day rally. take a look at what is going on in the equity markets. china coming back on after a lunar new year break. , 0.4% andai is lower commodity shares falling. after the china pmi number. the hang seng sliding for a third session. the kospi, little change. lower 0.4%. the japanese stocks edging higher for the second time in three days after this wing we saw following the boj's move to control the yield curve on the jgb's. anna: sophie, thank you. foru.s. jobs numbers
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january will be released later today. the pace of hiring and levels of unemployment may be eclipsed by a flare up in wage precious in january. manus: judy hyman is here. judy: economists are estimating that once again there will be relatively robust jobs growth. 175,000 jobsis being added to the american economy in january. roughly in line with the 180,000 that is the 12 month trailing average. 4.7% is the unemployment rate and economists are predicting that will hold steady. another key number will be the average hourly earnings. investors in the u.s. and economists look to see if there are signs of inflation as there is a debate over whether the new administration is going to spur inflation as well with some of
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its policies. the estimate for that number come at 0.3 percent. a 10th of a percentage point declining from december. we will be watching that number closely. one of the backdrops of for all of these reports is how many of the other more nontraditional at.ures will we be looking increasingly under the trump administration. trump and his treasury how many have said we need to expand the view of the unemployment rate. look at folks who have stopped looking for jobs because they cannot find one or who are only part-time. we will be bringing you those numbers as well. the labor participation force stands at 62.7%. let us introduce our guest for this morning. david boeing. welcome to the show. president trump's first jobs report today. the focus will be on the headline number, sub 200,000.
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that it will be about wages. a lot of states have raised their wages. massachusetts, up 10%. california, up 5%. >> the focus everywhere. all of the central banks what is theth equilibrium unemployment rate. in u.s., a fairly robust recovery. unemployment has fallen and wages are picking up. the fed in that sense is looking to see if it needs to raise rates. your the donald trump affect coming in on the fiscal side accelerating the monetary tightening coming through. inflation report from the bank of england came through yesterday. unemployment and wages, particularly wages. anna: interesting to see how the politics will play out. inhave seen a big uptick what was medium-size business
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confidence in the u.s. did that go on to create more hiring. ken donald trump claim responsibility for some of these short-term hirings? he has been very vocal on measures of unemployment and how they underestimate. he wants to reset that conversation. an argument -- underemployment. people who want to work. people who want to be in full-time work. people who have dropped out of the labor market altogether and want to get back in. maybe these numbers are not quite right. the proof in the pudding is wages. the odd thing about january in particular is wages get reset in january in those countries quite significantly. let a minimum wage affect coming
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through in some states but january is always a difficult month. it is the year on year comparison that often matters. the central bank is looking particularly at the labor market and wages. manus: eight or 9 million people potentially are out for more jobs. be small business it is going to be the highest since 2006. what he said on the campaign trail was about fiscal stimulus and spending on infrastructure. this is where it could wade through as well. driving the broader context. david: you had these central banks trying to get away from unusual measures in terms of quantitative easing. she is overtime contracting and they want to go back to life as normal so this is a good thing.
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the small companies -- that is where all of the action is. companies lead large out of recession. and the equity market has rallied further. you have confidence coming through. but we do not know. at the end of the day, the u.s. was recovering, it was surprisingly on the upside and there was momentum there. anna: i am struck by the number of conversations recently that suggested wages are the key. and it seems to be a case of distinguishing between inflation that is really something the central bank can react to and inflation -- it makes you wonder if wage targeting is on the radar. what they are really saying -- what they are really focused on is inflationary pressure.
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covers the fact that wages are a key component. if you go back to 1960's, britain woods, wages were much lower, and inflation was lowered. we do not know if we are going back to this new world. far can unemployment declined before wages take off? in the u.s., getting to that point. the bank of england revised down its view of unemployment rates peoplen so, you have talking about it being below four. anna: i knew i asked the right person. briefly,oductivity -- productivity is coming off a low base. if you want to think of it in those times. how does that play in on the economic level? david: it is true everywhere. look at the eurozone, the u.k.,
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the u.s. productivity zone has been disappointing. the bank of england has revised down their view of productivity. but this is simply because they now believe that people want to work more hours per work. there was a view that in some cases, people were working very long hours to make ends meet. the bank has changed its view. overtime, productivity growth will be lower. that is interesting. if we are having the debate here in london, the u.s. is in the lead in is as. what we are seeing there will come through our policy as well. you, t well david -- thank david so much. john williams joins bloomberg later today.
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you can catch them all bloomberg markets at 6:30 p.m. u.k. time. anna: coming up, we will go live to malta where eu leaders are gathering for an informal summit. manus: we will continue to preview today's jobs report, the first under president trump's tenure. parenthe snapchat company is filing for its ipo. this is bloomberg. ♪
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manus: it is 2:20 p.m. friday afternoon in hong kong. quarter seng is down a of 1%. chinese stocks are lower today and the central bank is making more moves to tighten monetary policy. anna: the pboc raised the interest rate. chinese manufacturing pmi for january shows a fall from december showing the lowest
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reading since september. what is the pboc trying to do? with this little bit of tightening we are seeing? good morning. a surprise move. the pboc went straight into market this morning with the tightening and it was a wake-up call. they are still looking at a tightening narrative. this is not your typical benchmark. is tightening liquidity. it says that the pboc has reached a point where they are confident enough to start reigning in the credit sloshing around out there. they hit the government globe -- growth target. now they are focusing on political change. the central bank now make have a little bit of room. that is the central message from
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today. it is not aggressive tightening but it is a symbolic move by the pboc that they are moving away from easing. manus: some lines coming in. stamping the numbers. the pboc raised the overnight rate to 3.1% from 2.7%. theserming a lot of numbers. i -- pmi data. it was not a roaring success but it was still above 50. the factories shut down for the week for the holiday. people were not necessarily worried about january pmi. the bottom line is that the japanese manufacturing sector has restored.
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space than a better they were. it is less about where we are at the moment and what kind of year is the chinese trading community heading into. we know that donald trump has talked about putative tariffs but we do not know how severe or be.spread that will that will be key for chinese manufacturing and its export center. things are broadly stabilized. it is more about the unknown factor which is the donald trump factor. anna: thank you very much for your thoughts. david a win is still with us. -- david o and is still with us. it is gone away kind of quietly.
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meanwhile, we wait to see what donald trump has to say and that will be the key factor for china. david: protectionism -- will there be a terrorist war going forwards. -- a tariff war going forwards. what ist quite know going on. and we see these concerns out thee about the liquidity in system and corporate debt being very high and the bank's exposure. ofna has to grapple with all these issues. and then you have donald trump and the fed raising interest rates. will be a very interesting but difficult year for policymakers. it is interesting to see the market reaction in the interest rates. the market reaction to the pboc and what it has done. this is a one-year interest-rate swap.
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the world is shifting gears in terms of its rate perspective. does that concern you from a global perspective? the china shift? to a: if it led significant problem in china that would be a problem. to see is theying deflation of any bubbles in china at the same time as the u.s. is having to raise interest rates as its economy is coming out of a long period of hibernation. that is a big issue for many other countries. how much exposure they have to dollar dominated debt. we just do not know. we are walking an interesting tight rope. the bank of japan still wanting to keep rates on the floor. anna: watching the bank of japan. they had the yen and the japanese market this morning. the schedule to operation did
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not manage to impress the markets and control yields the way they wanted so they came in with an unscheduled operation suggesting they are more serious than anyone not about controlling the yield curve and not letting the rates get any higher. david: they want to keep the rates down. if the japanese economy was suddenly to reignite to come at the bank of japan would be quite happy with the jgb yield rising overtime. but at the moment, we are not there. a want to ensure that they reach it. years of had many disappointing growth. they want to get out of it. and that is what they are trying to do. manus: escape velocity and animal spirits. anna: honda was basing its numbers on the fx markets. david, thank you very much. to talk tore going
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immigration and donald trump. at the top of the agenda or the european leaders as they head to their discussions. this is bloomberg. ♪
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anna: welcome back. giving you a live shot of tokyo. substantial movement in the dollar against the yen. 10 seven dollar-yen is what honda is counting on. dollar-yen is what honda is counting on. breaking news. 6:30 a.m. in london. metro,if you think about you think about cash and carry and the food business. for the fiscal first quarter, is profit excluding -- that
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a rise in terms of the first quarter. it comes in at 821 million. slightly less than what the market was looking for though they are confident of the fold your sales and their earning targets. a are splitting the business in two. the cash and carry business on one side and the medium market on the other side. ebid has as though a missed. new edition of daybreak is available on your bloomberg. and your mobile. having a look at today's stories. the cover story. manus: curve control. it reflects back on mr. kuroda, the bank of japan governor. reasserting his authority over the bond market.
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jgb'snk of japan bought to keep the 10 year yield down. it spiked up to -- percent. they were forced to move and his mettle was tested. next story is the preparation of new u.s. sanctions against iran. could be imposed as early as today to punish iran for sponsoring terrorism and testing ballistic missiles. as many as 17 entities may be targeted. fridayand finally, the data dump. pmi numbers are due out this wedding from the u.k., france, germany, italy, and spain. and later in the afternoon, it is the u.s. nonfamily payroll and wage numbers. -- s: on in
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ra: the boj with sign markets in its determinant effort at yield curve control. the yen gaining briefly earlier after a smaller than expected bond to purchase operation disappointed markets. the 10 year yield in the 0.15%, these to highest since the on -- since the onset of the negative policy. the yen resuming its losses. down against the dollar. boj made anr the unscheduled announcement to buy unlimited amounts of bonds at a fixed rate. we are looking ahead to the u.s. jobs data in terms of how the equity markets in asia are shaping up. topix a little higher.
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reversing a two day gain. we are seeing material stocks providing the biggest drag on asia equity benchmarks. chinese stocks reopening after a weeklong holiday. following on this first day of trading. the shanghai composite index down 0.5%. the boj is not the only bank in asia moving markets. interesta raising rates in open market operations in another step to tighten monetary policy. the one-year interest-rate swaps are here on this chart and they have climbed the highest rates this year. much up foryou very those details on the market. let us check over at malta. are gathering for their first meeting since donald trump took office. and a forecast of the unraveling
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of the union. anna: after meeting the president last week, theresa may will seek to a lay some of their concerns -- allay some of their concerns particularly on nato. caroline joins us from the maltese capital. we have seen some people suggesting we need to stand by european values. absolutely, european values will be the focus of this meeting here. the first eu summit since donald trump took office. president published a letter three days before the summit urging europe to remain united after what she described as worrying declarations by the u.s. administration. trumpso says that donald
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has now joined russia, china, theradical islam amongst threats against at the future of europe. -- we saw last night him last night upon his arrival in malta. he did not want to elaborate on donald trump and said the goal of the meeting was to solve the migration crisis. continued flow of refugees coming from libya and onto the italian coast. he said an agreement there was within reach. >> our main goal for the malta summit is to stem the flow of irregular migration from libya to europe. this is the only way to stop people dying in the deserts and at sea and it is also the only way to gain control of the migration in europe. caroline: clearly, eu leaders will have to find very subtle
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way to deal with donald trump's blunt ties especially given the concerns of some countries including poland for example who is concerned about not alienating a key ally. manus: a little bit of breaking news. talking about donald trump. administration referred to the judiciary role of order under dodd-frank. is about treating your customer fairly and doing the best thing for your customer and being open and frank about the fees and charges that you are paying. donald trump is to halt the obama fiduciary role -- rule. anna: a lot of the optimism amount markets about reducing regulation. this may go in some way to addressing that. continue theine to
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conversation about europe, and donald trump is a big feature of that conversation. how much of an influence will theresa may have on these talk?> looking to play that role that the u.k. has often played straddling the u.s. and europe perhaps. will wanttheresa may to act as a bridge between the united states and in europe. she is the only eu leader that has physically met with donald trump and she is expected here to urge the eu leaders to increase their spending. she will relay the message from donald trump that he is backing the nato alliance. he is also willing to participate in a conversation about the migration crisis. she said it is not because the u.k. is leaving the eu that she is not concerned about the so clearly aue
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balancing act for theresa may here. the eu leaders are well aware that she will use this special relationship that the u.k. is trying to rebuild with the u.s. as leverage in the brexit negotiations. will be included in the morning discussions on migration and in the lunch where they are supposed to discuss donald trump. thelater in the afternoon, 27 will meet without the u.k. to discuss a common strategy less than two months before brexit is triggered. manus: caroline, thank you very much for the latest. owen is still with us. the great gathering. the political context in terms of germany benefiting from the the euro. set itsa administration
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cap. david: absolutely right. is going to try to form that bridge between the u.s. and the rest of the eu but at the same time, the u.k. is moving towards brexit and the rest of europe will be slightly skeptical about what the u.k. is saying. thing is soigration big. the refugee crisis. eu -- i am sure they will come out with some statements condemning the u.s. actions. it could be very tricky. no one knows where we will be in a week's time. anna: what were -- what was your about the comments.
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what was your take? running anany is outsized current account surplus, way over the 6% limit set by the eu in terms of a country needing to be penalized for running these large numbers. germany stimulate generally more in the eurozone. enabling the ecb to normalize its policies. has a problem. it is not engineering. not pursuing the right policies for its self and the eurozone. argument hasg always been that germany should
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perhaps use some of its surplus for the greater good. that is unimaginable. of risk. measurement france, germany. this is france over germany rising. and spain over france which is coming in at a different direction. is political story in france heating up aggressively. david: it is all part of the uncertainty and whether the eurozone ultimately is going to currently is an brexit brings all of these issues to the four. they may try to formalize things. the politics is driving it further apart. the odd thing about bond markets -- france is widely held as paper. some of the other bonds within
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the system are not held by asian investors particularly post the original part of the crisis, 2012. a lot of the behavior in the --ket is driven by what asia asian investors are holding. it is a litmus test. and it is an issue for the ecb. with italy in particular, bond yields have been moving higher. and going through this year, at some point, we will have more discussion in europe about tapering. and the ecb cannot taper because of the pressures. anna: and because of the brexit risks as well. the ecb not tapering for a long time. can imagine the ecb still purchasing bonds in 2019.
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that is a perfect world. best case scenario. at the moment, these things are coming together which means the ecb may not even be in position to taper next year. to a certain -- extent, the bank of england is and holding with the european central bank carney cannot raise rates, it has an inflation problem and the ecb cannot raise rates because it has a brexit problem. david: the ecb has been buying aggressively since 2015. if the market in up believe that there was a breakup story out there, we have italy trading at 50 basis points over germany, france 25 basis points below germany. we can see tension coming back into this system and that is even with all of the buying. and we are seeing eurozone recovery. anna: good place to leave it.
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thank you so much for spending the morning with us. let us get back to the trump story -- to hold the obama it.ciary rule -- halting it was widely hated by many in the financial industry that requires companies to work in the best interest of their clients. ofus: goes back to the heart what donald trump promised on the campaign trail. he did not like a great deal of regulation. aretwo executive actions designed to lay out the trump administration's approach to the financial market and the emphasis is on removing regulatory burns, and opening up investor options. we are looking at what bloomberg is writing at the moment. the mosts are aggressive steps yet by trump to loosen regulation.
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this is the first a flagpole of deregulation. we have had trade. we have had the iranian situation yesterday. forays stepping into the of removing regulation with international services. the reason why the banks were so well bit. ona: i signing ceremony friday. we will see how that develops. coming up, bullish on europe. we will talk to an equity who sees-- strategists european stocks as extraordinarily cheap. this is bloomberg.
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manus: it is 6:49 a.m. in london. futures down .11%.
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we are waiting for the unemployment rate from the u.s. what will the wages? focus for theey markets today. good morning, sophie. sophie: president trump will halt and obama administration regulation that requires --irement advisory retirement advisors to work in the best interest of their clients. in response to the 2008 national crisis. the white house official says donald trump is scheduled to issue the directives at noon today following a meeting of more than a dozen of top corporate executives led by steve schwarzman. mediarst u.s. social po sinceto file for an i twitter.
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snapchat filed with an initial size of 3 billion dollars. it plans to raise as much as $4 billion for a market value of as much as 25 billion. million daily8 active users. the amazon projected earnings that indicates stepped up spending on warehouses, movies, and gadgets. sales and forecasts missed analysts' estimates. -- than forecastsed its full-year operating profit on rising demand in its two biggest markets, the west and china. the company says operating profit will probably rise to six point $9 billion in the fiscal year ending in march. an increase from the october forecast.
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those projections could be clouded. down froms stepping president trump's economic council after criticism from customers and drivers. his participation prompted a backlash on social media after the trump executive order on immigration. in an email, he said immigration was vital to the u.s. and his company and remaining on the council would get in the way of advocating for just change on immigration. that is your bloomberg business flash. anna: our next guest says european earnings will growth this year and europe is as cheap as the u.s. stephen, great to see you on the program. starting with europe. tell us about your valuation story around europe.
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is this justified by the political risk or not? arey sense is that markets over aware of the political risk. they have taken a straight line through what was perceived to be a shock in the u.k. referendum and the u.s. election. i just don't think that is justified by what we are seeing in the opinion polls. the referendum of -- in the u.k. was within the margin of the opinion polls. the italian referendum reflected what is happening in the opinion polls. netherlands -- either his message will be tempered or there will be a weak centrist government and then you have
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france, where marine le pen is a brilliant campaigner and she has done a great deal to detoxify her brand but she is finding it very difficult to break through in the opinion polls. manus: you have some bullish calls. little bit of inflation is a good thing for the numbers. it will help the overall earnings and you expect earnings to rise by a percent and dividend plays will be critical as well. yieldare saying that the are attractive. if the market does not read -- , -- rerate anna: let me get your thoughts on this story. donald trump halting the obama fiduciary role. ordering the review of dodd-frank. us ashould not surprise
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he always talks about reducing regulations. -- this sounds like a precursor of something to come. this will excite u.s. bank stocks or u.s. markets more generally if this signifies a reduced a regulation of approach. >> it is in line with what he said about deregulation. he has an entrepreneurial mindset. he wants to reduce the barriers. what he said last night is that to be perceived disadvantaged to american banks. same.all part of the anna: what has the fed been agreeing to? >> the financial stability board
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chaired by mark carney. basically, to hire regulatory capital requirements. manus: is that the case of the administration politicizing the fed? the letters -- a letter like that suggests the federal reserve is no longer independent. >> it is capitol hill making its views known to the fed. anna: your focus is on europe. but there is a lot of excitement about donald trump regarding lower taxes and reduced a regulation. will markets think this is not all about protectionism? pick you up on the trump train. i do not think this is all about president trump. the headlines are dominated by in theest news administration but the improvement in the equity market started in june.
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that is when we first saw people looking more favorably on financials. anna: thank you for your thoughts. up next, talking more about trump and jobs.
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♪ manus: president trump will order a review of thought rate -- dodd-frank. advisors will work in the best interest of their clients. could eclipserts the headline number. manus: bank of japan fights for control over rising bond yields roiling the government debt. app makersnapchat filed for an ipo seeking to raise $3 billion.
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manus: it is daybreak: europe. the flagship morning show from london. i am manus cranny. -- turkeyi am inflation rate 9.92% year on year in january. turkey consumer prices rising by 2.46% month by month in january. the kind of inflation figures that would make developed market central banks eyes water. thehe latest minutes from cert, they predicted and up inflation uptrend in according to economists before these numbers dropped. manus: mitsubishi, the financial company has delivered their that quarter netting of -- is significantly above the ¥235.2 billion.
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making its first profit overseas in the past several years. 296.4 billion. mitsubishibeat for ufj. how are the markets looking this morning? deregulation, deregulation. that is the theme, i think, over the next eight hours of the day. at london and paris, opening up briskly. paris up half of 1%. not a bad day. central banks of the world are not going to be wrongfooted, so to speak. anna: risk radar, we will show you where we have been on various measures. payroll datag on later today. 100 80,000 is the consensus number we will be looking for. it got futures for your. snp features -- futures not giving us a big deal.
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their, you saw jgb yields off the boj reasserting its control over the curve. they were forced to do an unscheduled operation just to try and convince people how much they wanted to control that 10 year jgb yield. manus: obviously brought it back into control. who wants to stand in front of the boj. the jobs number is probably what is coming and it didn't -- administration would decry the unemployment rate. trump, when we say he will tweet about it, will he join the conversation around the jobs? how will he politically maneuver around that job story? he has been vocal on what he sees as the lack of validity in that number. what is that? that is the price of money in
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china in one years time. raised maybe aey lending rate. that market says rates from the pboc will be higher in one year. anna: let's get the first word news. the bank of japan offered to buy an unlimited amount of bonds at a fixed rate in an unscheduled operation to reassert control over surging yields. the central bank will buy five to 10 year securities from a secondary market. it is offering to buy the benchmark 10 year notes at 0.11 percent. after an attempt to cap yields by spending bond purchases. president trump will halt a regulation that requires retirement in pfizer's to work in the best interests of their clients while the new administration reviews the rules. it will also order a review of
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pertaining to the 2008 financial crisis. will attend the signing ceremony at about noon eastern time today. president trump's administration is said to plan new sanctions on iran as early as today. according to two people familiar with the plans, penalties are aimed at punishing iran for sponsoring terrorism and testing ballistic missiles. entities may face sanctions. both trump and national security adviser mike flynn have said trump -- iran is on notice since the test last weekend. china's central bank has tightened monetary policy by raising interest rates. just as cash demand is expected to ease after the weeklong lunar new year holiday. of purchasethe cost agreements by 10 basis points
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each. that follows an increase in rates on medium-term loans last week. is stepping down from president trump's economic advisory council after criticism from customers and drivers. it prompted a backlash on social media as a trump executive order on immigration. he says immigration is vital to the u.s. and to his company and remaining on the council would get in the way of advocating for it just change on immigration. global news 24 hours a day, powered by more than 2600 journalists and analysts in more you can findtries more stories on the bloomberg. this is bloomberg. is going onon what with markets in asia. a reversal of the two day gain in regional stocks. coming back online after the lunar break. a drag led by banking and energy shares. we have the hang seng sliding
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for its fourth section -- session. we have the taiwanese currency closing higher. we have seen fluctuations for japanese shares. japanese stocks edging higher for our second time in three days. a quick look at what is moving. sony up almost 5%, jumping to a three-month high as its business division offsets the anxiety around its movie unit. taking a look at what is going on with that space. what is happening with the dollar-yen, earlier following 20 -- ion low of 112 -- human the onet back up above 13 level. the dollar-yen is the worst performer in the early -- asian currencies base today. we have the offshore yuan on the decline where is the onshore yuan is on the rise following a softer than forecast china
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number earlier this morning. that is the view in asia today. back to you. manus: thank you for the roundup there. let's turn back to the breaking news we have had in the past 30 minutes. president trump will halt what is called the obama administration regulation that requires advisers to work in the best interest of their clients. a reviewmp will order of dodd-frank, enacted in response to the 2008 financial crisis. joining us on the phone's chris wheeler. on bankingce to have sector. thank you for joining us. what is your initial response to this, ordering a review of dodd-frank? we thought he would take out regulation from the financial services sector. chris: he has talked about this in the past. doesuestion is, what form the reform take? because clearly, one thing we can be sure about is this testing mechanism put in effect by dodd-frank has made the u.s.
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banking system extremely strong. with that? tamper what will he do at other factors, the vulcan role is being discussed. the result in the dodd frank act. it is what part they attack. manus: what is going to win him the most amount of votes in america and support in dodd-frank if he goes after. loosening up on trading or do you think regulation has hit its peak in terms of capital requirements? chris: i think a lot of talk -- this goes back a few years ago, talking about nobody is lending money when people didn't want to borrow it after the crisis. it is the same in the u.s.. this concept of stopping people lending. loan closures have been slow. i think it is a sign they want to lighten up the regulation. again, i touched on the falcon role, largely trading has a big impact on the liquidity of day
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to day trading. mentioned at the beginning, that is important. you can't sell your clients the best products, you have to seldom the cheap this. -- cheapest. but if they want to do something alongside dodd-frank and there has been talk of upping the capital at the same time as they loosened regulations. this something that increasingly separates the regulatory environment of u.s. banks versus european banks? is this something that like to fire under u.s. banking, equities versus the european peers? stocks have been trading up this afternoon because while we know this is coming, when you have an announcement, people say it is going to be positive for banks. jamie dimon made the point that all of this talk about making the banks less complex in terms of regulation, they have done all that work.
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why dismantle that? the most important thing is to stop further facility on what banks can do. capitale dominating markets globally and will continue to do so. there are already in a good position. it is whether they up the ante on capital for lightning regulation. that is what they have been talking about, two prominent republicans. first great to take your take. that is chris wheeler from atlantic equities. now, back to the number of the day. the jobs number. the first under president trump. out a little later this morning. let's bring in stephen mackler -- stephen macro smith from j.p. morgan. great to have you with us. two diverse interests. technology, you are hot to jobs. are fed up with people talking about a trump trade. i am paraphrasing, but you said the ignition for renewed
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enthusiasm was already there, so the foundation today will be his first jobs report. what is important to you today and this week? i think the most important release is the pmi in europe. they indicated things are still improving. satisfactory. everything we are seeing in bond markets and inflation swaps, picking up as well. i think that is the most important thing for us. anna: when you look at what is happening in the united states, partshave been upsetting to silicon valley. a lot of fallout between the two. just looking at his plans as we know them so far, what is it that he is doing that is going to have the most impact on the universe that you look at? is it around immigration or other policies? mark: i think the most headline
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grabbing policy is around immigration. in terms of these companies getting this how it that they require -- talent they require. when they announced we are not going to see as much of an issue as the market first thought, it is all about deregulation with trump. in the case of technology, people have been talking more about regulation. on some of the -- some of the big tech names last year, amazon, facebook, broke down 10% after trump was elected. i think the regulation will be light touch. manus: from ceo level, the stage is set for -- i am being generous, -- a moderate level of confrontation at this juncture. they are not bedfellows at the moment, are they? there are no bedfellows in trump's process at all.
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he is very adversarial. is not going to want to up step back, though. anna: coming back to the s, where side of thing are you focused in europe at the moment in terms of your equity strategy question mark saying europe is undervalued compared to the united states. stephen: europe is trading at a discount. part of the european profitability, it has been unsatisfactory for seven years. fueling earnings reception. financials were under pressure, then you have commodities and energy. at the moment, we see a relatively sustained recovery across the world. you are seeing a pickup in growth in emergency mark -- emerging markets. good background
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for profitability. we think profitability can recover and therefore, we are trying to play that to areas of the market we expect economic growth. classically cyclical the quiet you have the cyclicals outperforming relative to defense, down 8%. cyclical on a turn higher. does that perpetuate question mark is not already pricing in -- pmi question mark question mark -- >> if you look at where that came from. whichs the point at cyclicals and financials start to move. shows sustainable pickup in growth. i think trade will have further to run. people will wait. anna: thank you so much. mark will stay with us and we will talk more about the
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technology sector in just a moment. we do want to bring some breaking news for viewers. we have news coming out of the french market. this operates at power solutions forpany generating electricity in france. they say france will subscribe to the 2.5 billion euro reserves capital increase. getting more information about the capital increase coming through this morning. manus: let's see what else we have for you in terms of the business flash. sophie is standing by. sophie? president trump a halt and obama administration regulation that requires retirement advisors to work in the best interest of their clients while the new administration reviews the rules. the president will also review dodd-frank rules in response to the 2008 response -- crisis. around noon eastern
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today following a meeting with more than a dozen top executives led by blackstone ceo. amazon's projected earnings for the quarter indicate steps -- step up spending on movies and gadgets will continue. sales missed forecasts. -- despite a forecast revenue of 23%. it regional indian official says apple will begin assembling iphones in the nation by the end of april. apple has tapped taiwan to put together its iphones in bangalore. the iphones will be targeted at the domestic market. india is the world's fasting -- fastest-growing smartphone market. profitsported operating on rising demand and its two
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biggest markets, the u.s. and china. the company says operating a 6.9it will probably rise to billion dollars in the fiscal year. an increase of 21% from an october forecast. this projection can be clouded if protectionist u.s. trade policies raise costs. uber ceo travis kalanick is stepping down from president afters advisory council criticism from customers and drivers. colonic's participation sparked backlash after the immigration order. isonic says immigration vital to the u.s. and its companies and would get in the way of advocating for just change on immigration. that is your bloomberg business flash. manus: thank you very much, sophie. this snap, the creator of -- the app snapchat lost $550 million last year. that is according to the ipo perspective company.
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manus: it is hoping nonvoting members will focus on its division for the future. good to have you with us, mark. here is the latest offering. snapchat, $3 billion. believe in my future and make a half $1 billion loss, but i want your money. would you give? i obviously need to see more of the detail. we have had information over -- out overnight. there are clearly a number of concerns as far as i'm concerned. when you look at it compared to facebook or twitter, it stacks up more like a twitter than a facebook. it is interesting that -- we look at facebook at the same , ite of evolution in 2009 was doing two or three times the growth rate snap is doing and was profitable. one of the biggest concerns is
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the lack of profitability. itss almost mirroring revenue and loss. 5 million in revenue, 5 million in losses. at this point in the investment cycle, investors don't like that. snap has been benefiting from a funding environment over profitability. does that change is to mark -- change? very public markets are unforgiving as far as profitability is an can -- is concerned. about a year and half ago, fireeye, similar profile. stock 20%.ed missed the market is not happy with companies that lose money at the moment. overnight,on numbers you see growth, growth, growth. operating income will be quarter
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to $900 million less than it was a year ago. he is going after revenue growth and is spending more money on capital expenditure. at the expense of profitability, is that a warning sign to you? what do you make of that last night? mark: i'm less concerned. they are profitable, generating lots of cash. that is key. they don't need to draw on capital markets to grow. they can do it from their own cash resources. for me, amazon is the leading disruptor among tech companies at the moment. a few weeks ago, everyone was talking about alexa, artificial intelligence. that was the product. the box you can talk to. it will solve all your problems, manus. important to examine it in that context and look at not just as a retailer. it is dominated by the web
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services business and the third-party retail business. providing a platform for other retailers, not just its own first party business. anna: i am interested in the role of india, because we see amazon talking about india and the opportunities. a continued to push into that frontier for amazon. and we have a story on the bloomberg about apple announcing production facilities in india. market --big frontier this is a big market that they want to get into. apple is not as big player as they want to be and yet, as is a time when politically, these businesses are being encouraged about growth in the united states. how do they manage that temptation of india, with the political reality at home? fine balance. india will be a huge market, but it will take a long time to develop. a lot longer than china. it will be longer before we see indian consumers buying smartphones in the way they do in china. at the same time, have got to balance the requirements and
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needs they put on them by the company minister should. amazon announced it would create 100,000 jobs in a mirror -- in america. there balancing both sides. manus: you mentioned china. and .9 billion unique users. 700 million of those happened to be in china. a couple of issues at play. one is the china effect on facebook. two. have we hit peak mobile advertising revenue for facebook? discuss. mark: taking the last point first. absolutely not. the global advertising market is a $600 billion market. if we x out of china, it is about five -- $5 billion. china has almost half of the internet population on its platform. , the is ability to target effect is so strong it can take
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a bigger share. it is not about whether facebook and grow by another 50%, it is about how it can grow or three or four times as much as it is. anna: it feels like part of the establishment, you say it is hardly started. mark: the sequential growth in monthly users of facebook is faster than snap stat -- snapchat. passionate is a call. the next thing for facebook is -- if we are going to go three or four times, have we got to be prepared, if you are an ambassador to say, he's going to spend a lot of money on artificial intelligence, growing the next big thing. what is he going to do, what is facebook going to do to become the all-consuming, all content. what is he going to be spendi ng? spending are already
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lot of money and still having 64% margins. .hey could probably have 85% it is a balance. i think the respect their investors, they balance the need of growing the company against the needs of the investor base, perhaps more than they give -- get credit for. hugecan afford to spend a amount of money given their size, without necessarily ending profitability too much. anna: has the faith news stories -- fake news stories stuck to them? has that gone away? mark: honestly, i think it is a sideshow. it is impossible to vet every news story. in terms ofk at it the number of stories that get put up or the number of tweets in the case of twitter, you can't vet that. it is just part of doing business. manus: are you is bullish on apple? apple.'m less bullish on
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if i was a pension fund holder, i would be very happy. lasta nice dividend, quarter suggested the iphone declined has been halted. we have a good, stable platform. longer-term, i am concerned about their ability to maintain that platform. if we look back 15 years, ericsson 10%, motorola 15%. where are they now? nowhere. anna: do they have to open up the ecosystem? i would say yes, the world is going more open. if they did open up their ecosystem, they really put the price point of the product at a more vulnerable position. anna: thank you so much for your time this morning, mark. joining us here in the studio. day in thes jobs united states of america. first one for donald trump. of course, we will have a conversation with the fed. john williams joins the
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bloomberg team at 6:30 p.m. u.k. time. anna: look out for that later on. markets a touch higher after the start of european trading. this is bloomberg. ♪
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♪ manus: welcome. you are watching bloomberg markets. this is the european open. i am guy johnson in london. matt miller over in berlin. what are we watching this friday morning? dodd-frank. residents trump is ordering a review of the wall street reform. will congress back any change? we will talk about producer he role changes as well. the changes out of washington. is the boj -- boj moving yields? they seek


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