Davos keynote. We will take you live at 1 p. M. London time. And some like it hot. Mario draghi says the euro area is firing on all cylinders. Hes not going to get in the way. When does the first hike come . The cognitive Monetary Policy is still required. Matt we are less than half an hour from the european open. We are looking at gains across the board. Futures up to 10 stash. 2 . In cace strong gain futures and euro stocks. You can see this is a threeday chart. You can see the big spike there. Now coming back down. Still at a relatively high level. Coming off the highs we had previously seen. Guy european equities would generally lower. Equities saucer from sweden to denmark to norway. The nordics didnt have a great day. The kiwi trading down by. 7 . The aussie dollar, the norwegian krone, the swedish krona, yes there is a relationship. Day for the dollar and for the single currency. Lets talk about lets happening elsewhere. We could be about to head for the first negative week for iron ore in quite some time. It looks like chinese mills have completed their inventory rebuild. It signals a bunch of things. It could be an interesting session for the miners here in europe. Lets get back to davos. He you is ready to sign off on his position for a brexit transition. On monday to expected to lay down a december 2020 expiration date. But those familiar with the discussions in brussels are apparently open to extending the deadline. Lets get back to davos. The eu commissioner five financial and economic affairs. Good to have you with us. We heard that perhaps brexit is not as bad as expected. David cameron was against brexit so he knows how bad it is. It was a lose lose situation. We would be much better with the u. K. In the eu. Now we need to manage. We need to make it as smooth as possible. Reduce the losses. Thats why we are open to a tootiation which will try find a close relationship with the u. K. No longer a member of europe of the eu its a european country. Afteral work will start the first phase of discussions. A lot is still at stake. Dont gets and london it right, other Financial Centers will gain. We are really working on preparing our negotiation positions. We want to have constructive relations with the u. K. If that means Foreign Trade relationships and customs and freedom of market. With our owniate interest and then we will negotiate with their interest. I hope we can meet. Im quite sure we can. Then theres also the political landscaping in the u. K. We are in negotiation with goodwill. We have plans for the future of the eurozone. What can be expected . Europesun is shining in and the Economic Situation is much better. We have a gross over 2 . Unemployment employment is picking up. That theres always the next crisis. To utilize this good. To repair the roof and prepare for the future. Means we need to establish, for example, a backstop for a mutual fund for our Banking Sector. We cannot have a mortgage crisis like 2008. We need to extend the economic stability. It could be our own Crisis Management tool. Also the backstop for the srf. We need to create establish and function. Lets call that a budget. Probably small at the beginning. Preparing the future and cable of promoting investment. Finally, we need to democratize and strengthen our governments. My successor should be the minister of finance for the eurozone. Everybody woman who in the eu and eurozone feels capable to discuss in the name of the eurozone with the secretary of state of the united the control of the european them parliament. What about a Banking Union . It certainly a priority. Is the time for that . Quite confident we can reach consensus on that. We need to complete our ideas. We have completion and resolution. If we need to have a clear backstop, so we are really strong. I want to talk about tax reforms in the u. S. You say its against its against International Trade rules. Why is that . We dont have comments to on the u. S. Is reduction in tax rates. We need to watch what are the economic consequences. To long run we need to watch carefully. We have concerns or questions about to know whether it is compatible with the best processes for the antitax a fraud schemes. We also want to know if it is protectionist. Could be a damage to the rule of stability. , from thent letters eu and the commission, to the secretary of the treasury. They have responded orally. We are waiting for it. We need a Good Relationship with the United States. We are partners. We are friends. Two systems with similar sets of values. President trump and europe are both here in davos. Blocks, need to cooperate. How about the push for a weaker dollar . Weaker. Ays ago it was yesterday it was strong. I believe on that, its not good for the World Economy when there is a currency war. Currency must not be used to enhance competitiveness or damage the competitiveness of neighbors. Have a verywe must low key wording of that. We must allow the Market Forces to define that. Im not going to give in the comment on that. We need to strike the right balance between the euro and the dollar so that both sides of the atlantic can expand at the same time. A win win we thank you for your perspective. He is the eu commissioner for economic and financial affairs. Guy thank you very much. Interesting stuff about currency wars. Earnings season for european banks kicks off. Live from davos, this is bloomberg. It is age 40 matt 8 43 in the morning and davos matt . Looking at the gorgeous ski town in switzerland. Later on, the governor of canada us onlbank will be join bloomberg television. Its an interview you dont want to miss. From european banks fourthquarter earnings are likely to be more informative than it has been in recent years. Banks will have to justify caution around payoffs payouts. Some factors suggest that expectations are not entirely positive. Lets head to davos now. Here with a man whose quebecois blood always runs hot runs hot in the cold weather. Good times for the economy dont always translate into good times for investors. How long can the bull run last . Its hard to guess on how long this recovery will continue. I talked with my colleagues earlier this year and one thing i said was you look at all the positive signs. Interest rates are stable. I say, i havent felt this good since 2007. Does that scare you . Cautious. To be a bit i want to enjoy the moment. All signs are positive but its good to be reminded that we are in the market for the longterm and their ups and downs in the cycle. At some point, maybe well see a bit of a correction. That should not scare people away from continuing to invest. Does it feel close to the pink . I dont know, im not going to market time this. We have spoken less about the economy and the investor perspective and the talk is been a lot more about sustainability, Climate Change, social divide. To bring back in globalization and the people that feel they have been left behind. World a kick Economic Forum is kind of a misnomer. I have not been here since 2011 when the talk was all about the Global Financial crisis. I find the themes this year much more diverse and broader. Forhat are your priorities 2019 . To whatnuing to advance we want to do with our clients. That as an active asset manager, we can outperform in what may be a more difficult market. We are at the end of a threeyear bond bull market. Go up and down. I think an active Asset Management style will continue to provide money for our clients. I want to stay focused on that. Before i get into the active or passive debate, the end of the bull market doesnt necessarily mean the beginning of the bear market. Is that your view . In a situationre where we have a significant risk. Theres a lot more chance that rates will go up and that they will go down. Risea 100 basis points will have a meaningful impact on the market. I want to be cautious. The you expect to see outflows in fixed income . Little. Ve seen very i think investors are adapting their strategies. I invest for the long term. Adjust certain parameters. Try to go into yield products. Thats what we are talking about with our clients. Help me understand here. What is the sense in owning fixed income, as you pointed out. We are at the end of a 30 year bull market in bonds. That doesnt mean a 30 year bear market. Is the future for bonds certainly worse than it has been in the past. You can look in the Rearview Mirror and expect to see the same thing. Clients toencourage reallocate out of fixed income and into Something Else thats going to offer more protection or more upside . Fixed income is a broad category. We are trying to put to our Clients Solutions that provide income over medium to longterm. That can be dictated by Interest Rates. Will you be a passive accent manager . No, because we are good at what we do. Value for money. Passive is by and large a scale game. But you have scale. You have in excess of 1 trillion of assets under management. Its scale inut what we do best. We are focused on going after the money in what we call the low value added benchmarks. That is what we are looking at. Andive has a role to play wewe put together solutions may actually include some passive products or strategies that complement them and provide them the right profile. You believe active management will provide better in the future . All about its managing risk and passive is the opposite, not managing risk. Managing risk will be the way to go. You are certain of this . Correct. What about mifid . Tell me about your negotiations with banks about research. Are you trying to drive a hard bargain . It is the opposite. For the example of research, nobody really price it before. A year ago, the price was ask. Later, the price is substantially below ask. Everybody is asking themselves, do i really need this . In fact, its good discipline for everybody. What about consolidation . Talks did not materialize and anything . Will you pursue other consolidation opportunities . We see ourselves of a natural consolidator. We have scale that is a Business Model scale and a Business Model that is not unique but nobody has done our model with such effectiveness and subscale . A number of investment teens us. To us and try to join of course we are going to continue to play a role in that space. Are you working on something right now . They are always knocking on the door so we are always talking to people. Thank you very much. Eric, thanks very much. There from davos. Covering a wide range of topics. Lets bring you more sound from davos. Blackrock urging investors to keep money out of cash. We spoke with him at the world Economic Forum. Here we are. Our Financial Markets are up three times since the financial crisis. The pool of money that is sitting in cash has never been greater. Where problem in china 45 of disposable income is in a bank account. If you speak to the finance minister of france, 72 of all french savings is in a bank account. You can imagine what we would have worldwide if we had better financial literacy. More people investing in the long run. The type of gains people would have. I think that is one of the bigger crimes. We dont talk about it. Thats one of the reasons why i believe we have more momentum. I was told yesterday that we are already in a bear market for bonds. A 100 basis point move in treasuries would equal as bottom bond mayor market as we had in 1981. How long do you think will take . Art you going to agree with that . In 1981. Mber i was a bond trader. Its going to take much longer than people think. Im more concerned about a flattening yield curve. The wall of money that is sitting out there is still quite substantial. You would have to see behavior change by the bank of japan and the ecb. I dont want to anticipate that type of rapid change. Guy larry fink, ceo of blackrock. Five minutes ago go into the start of cash trading. Mip an eye on the minors ners. Iron ore trading down on the singapore. Keep an eye on this deal makers as well the steelmakers as well. Also questions about what amazon could be doing in the u. K. With its wardrobe business. That could be worth paying attention to. Could be an interesting story. Matt they typically take over a large share of markets. Wheretalk about a market amazon has it really penetrated. The ultra highend luxury market. Dmh did quite well in its second half. 11 . Ue up 11 said earnings 6 higher. Jpmorgan says that will continue. Lvmh selling its own handbags, selling perfume from dior. They own a number of other handbag makers like fendi. Bands other luxury brands. Coming up, is the market open. Futures are pointing to gains across the continent. We continue to bring you news out of davos. The open is next. This is bloomberg. We use our phones and computers the same way these days. So why do we pay to have a phone connected when were already paying for internet . Shouldnt it all just be one thing . Thats why Xfinity Mobile comes with your internet. You can get 5 lines of talk and text included at no extra cost. So all you pay for is data. Choose by the gig or unlimited. And now, get a 200 prepaid card when you buy an iphone. Its a new kind of network designed to save you money. Call, visit, or go to xfnitymobile. Com. Jeff one minutes ago until the start of castrating this friday morning. Cash trading. 12473 aheadtrading of the president s beach at dallas. It to go int wants the opposite direction. The nikkei finishing down the session. Elsewhere up by 2 10 of 1 . Take a look at this this morning. Take a look at the mining stocks this morning. You down into this open and find out what is going on. That could be interesting. It is expected to open positively. To open up this morning. Lets take a look at the sector story and walk over and figure out where there is some action going on. This will fill in. Consumer discretionarys, a hotspot. Materials looking more mixed. This could be the basic materials stocks versus the gold precious metal stocks. The commodity and of the spectrum. Energies reasonably welded. Health care looks solid. Industrials are mixed. Others quite welded. Matt i am looking at the mov screen right here. 311 gainers to 147 losers puts it at 21 this morning, and we see slight gains in europe. You can see this on top, up 2. 5 . It is adding more points to the startek stoxx 600 than any other stock. We talked about the bourbon business. See some of the banks on here as far as the winners are concerned. Lloyds Banking Group is one of those, and you see some of the chemical and drugmakers as well. These are all gainers. Take a look at the laggards. Holdings, one of the names that is pulling points off of the stoxx 600. It is only down. 4 . And then you see British American tobacco, only down. 1 . This stock is so heavy that when it falls that much, it is one of the top 10 point producers on the stocks. Britain, lets talk about brexit. It is both a pain an opportunity for ireland. The country has one of the inest Corporate Tax rates western europe. If location means it is hoping to attract thousands of bankers from london after brexit. Then the problems surrounding its land border with the u. K. Persists, and ireland faces a threat from the u. S. Following President Trump tax reforms. ,ets go to francine in davos joined by a guest out of ireland. Francine we will talk about brexit in the border issue. I am pleased to welcome the irish finance minister to bloomberg tv. Thank you for joining us this early in the morning. Guest not at all. Francine it has been 10 years since the financial crisis. Where is ireland right now . The economy will grow by 3. 5 this year. We have seen very strong economic growth. We expect now we will have well over 2 Million People that work in our country this year, and seeing the possibility of our country moved to full employment also at the same time as we balance our books and eliminate our deficit. Ireland has made remarkable progress across a number of years and we are very committed to a stable outlook for our country with moderate but sustainable rates of growth. Francine what worries you the most about the Irish Economy . Brexit . The great strength of the Irish Economy is its openness, and of course, to answer your question, when you are open, developments elsewhere can have an effect, but this is the very reason that we have been so careful with our tax policies, with how we managed Public Expenditure and making sure we have the right competitive environment and ireland. Weare very confident that have the right proposition in ireland to continue to support job creation and investment in our country, but we acknowledge we are living in a changing world. We can see clear signs here at the moment. Of the taxecause overhaul in the United States, are you concerned it will attract businesses and to the u. S. . All of the international and i american investment, we will retain. You are an International Company that wants to have a Global Supply chain, wants to be part of the european single consumers serve as outside of america, ireland will continue to be transatlantic ridge. We are going to be the only englishspeaking member of the European Union. We have a highly educated workforce, and we believe that other parts of our economy will help us sustain what we have achieved. Francine how many ceos want to move staff . Paschal i have spoken to a very large number of banks since the brexit referendum, and we have seen many banks make positive decisions that move investment and soft ireland such as jpmorgan, bank of america. We are seeing those moves, and that will be part and is part of how our economy is responding to brexit. Those discussions are ongoing in davos and elsewhere. Francine you still retain holdings in a id, bank of ireland. Paschal my plan is to conti