Surveillance. Lets check in on your markets. You can see the stoxx 600 pretty much flat. They are down a touch, but pretty much unchanged. We did see a nice rally that started in the u. S. Filtering through to asia. Oil advancing. Havea reminder, we may little trading volumes because it is president s day in the u. S. And Chinese Markets are closed after the new year. Coming up, we speak to the former italian Prime Minister. That is coming up next. Then we talked to Credit Suisse. We talk sustainable investing. Later on, we talk bonds, the selloff, and what is next in the markets with andrea silverman. Lets get to the bloomberg first word news. Nejra u. K. Prime minister theresa may and her ministers gather on thursday. May seeks to unite the factions in the cabinet. It is becoming clearer that the u. K. Wants to stay close to the union in some areas while breaking free in others. Employment numbers are scheduled for monday. Imports exports and both registered strong gains in january. Overseas shipments rose 12. 2 while imports grew 7. 9 . The increase resulted in the first Monthly Trade deficit in eight months. Eurozone finance ministers vote today on a candidate to replace the Vice President , with spain and ireland in the running. The head of latvias central bank has been detained by the countrys anticorruption bureau. There are calls for the governor to step aside. His lawyer says he considers the move clearly illegal. Two of irans regional foes have delivered warnings against the country, saying it is time to confront the islamic republics encroachment on the middle east. Israeli Prime Minister netanyahu described iranian aggression as the greatest threat to our world. Saudi foreign minister said iran needs to pay a price for its aggressive behavior. Londons Property Market has moved out of its boom phase, warning sellers to be more realistic about their price demands. A new report showed asking prices were down 1 from a year earlier in february. London was the u. K. s worstperforming Housing Market in 2017. Theres little to suggest any upturn is in store. Sweden is on its way to becoming the worlds first cashless society. The value of notes and coins has dropped to its lowest level in years. More than one third of swedes claim they never use cash. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. Im nejra cehic. This is bloomberg. Francine lets kick it off with the u. S. President , donald trump. Hes been criticizing the fbi, democrats, Robert Muellers investigation, and his own National Security advisor over russias efforts to sway the u. S. Election. Hours,g 14 times in 24 trump focused on defending his victory and insisting neither he nor his campaign colluded with the ross and the russian effort. The l. A. Times is reporting that rick gates, a former Trump Campaign aide, agreed to plead guilty and cooperate with u. S. Special Counsel Robert Mueller. Montig us for more, mario , italian senator for life and Prime Minister from 2011 to 2013. Also with us, the nobel prizewinning economist, professor at the London School of economics. Joining us now to talk specifically about donald trump is our senior writer, stephanie baker. Thank you. Good morning and welcome to the program. Stephanie, thank you for keeping us uptodate. Tweets, 24 hours, none of them on russia as in they interfered in the election. That has been the narrative, how remarkable it is that trump has not said anything defending United States democracy against russian meddling. We are facing a november election and there seems to be no cohort needed response from the president on how to prevent russian meddling in that election. The indictment was significant for a number of reasons. It shows that special Counsel Robert Mueller is nowhere near done his investigation. Theres much more to come. Francine when is the next step . Do we have any idea of the timeline . Investigation has not been a leaky shop. This took a lot of people by surprise. He decided to go after social media meddling rather than dnc hacking. This did not, despite trumps tweets, clear the campaign of any collusion. Didnts not this touch obstruction of justice, which many think mother will turn to next. The reports that gates is cooperating is significant and could open a new chapter. Francine do the tweets matter . Does it touch the trump base . Hes basically saying the fbi should focus on other things instead of Robert Mueller or russia. Do people care . He is speaking to his base, for sure. Even within Establishment Republicans in congress, this will be a hard thing for them to defend, for the president to not criticize russian meddling in the election, to not come up with a response to prevent it in november. Theres a lot of calls for paul to dond Mitch Mcconnell pursueng, to perhaps further sanctions against russia for that meddling. Francine youve been in politics. Does this change the way you do diplomacy . I dont know whether it is tweets or the global crisis. I think part of this is universal by now. Social media and the internet change the nature itself of politics and of political reactions. Detracts,urse, this because in the case of the u. S. , the president himself, this detracts from the sense of authority that sometimes we in europe complain about, but after all, we would like to be there. The other piece of news is that one of the biggest risks to world trade is possible import tariffs from the u. S. Administration, from the Commerce Department. Do you worry that we could see a trade war . I was hoping it was more rhetoric than actually imposing the tariffs. We have a proposal for specific industries. There are industries that the u. S. Will never do well in those industries. Now ise u. S. Needs to do to find industries where it has a comparative advantage and move ahead. The administration is saying they will impose tariffs. Robotics, artificial intelligence, everywhere you go, you hear about the impact it will have on the economy, yet the u. S. Saying we will build steel and aluminum to employ workers. I think it is a crazy idea. Francine how much do we know about whether they will indeed impose these tariffs . They are looking at weighing tariffs as much as 53 on steel and 26 on aluminum. That is part of the problem with the Trump Administration. They are not providing guidance. It could come at any time. After these huge tax cuts, which the community welcomed, i think this is going to go down badly in the Business Community. Francine if this is a crazy idea, will they not back away from it . I hope they will. It is not going to be good for the u. S. Economy in the long term. It is not going to be good for the Global Economy. In a growingriffs industry that cannot compete internationally and therefore it needs to build some critical mass. Then you remove the tariffs and you go ahead, you are more productive, you can compete. This is not the case. Old dinosauran type of industry. Francine this is just part of the America First policy, right, senator . Yes, but America First policy, i think the president will realize soon, requires a more or less orderly international context. Today say that as we look at politics on one hand and at Monetary Policy everywhere on another hand, we can observe the following paradox. In the past, it used to be the case that politics tried to convey certainty, predictability, and Monetary Policy tried to be effective through surprises to the marketplace. Now Monetary Policy provides forward guidance, but politics in the u. S. Tries to play on unpredictability. This is a new paradigm. Francine we will discuss that. Thank you so much, mario monti and christopher. Mr. Monti, former italian Prime Minister. Thanks also to our senior writer, stephanie baker. Plenty more to come. We will be talking up the business of Sustainable Finance later on. Coming up, we talk about this new paradigm that mr. Monte was talking about. We will also be talking about brexit and the italian elections. This is bloomberg. Francine this is bloomberg surveillance. Im francine lacqua. Lets get straight to the Bloomberg Business flash. Nejra siemens plans an ipo of its Health Care Division in the first half of this year consisting of a secondary offering of shares. According to people familiar with the matter, the ceo is likely to use the money generated to help acquire companies and pay down debt. Siemens says it will retain a majority stake in the longterm. Reckitt Benckiser Group says it will bounce back as it brings more savings. The u. K. Based maker of condoms and painkillers forecast that comparable sales will rise in 2018 after the first 12 months of stagnant sales in the companys history. The ceo told us hes optimistic about the coming year. Year as a cap tough year. During that year, we made transformational moves. We sold our food business for a good price. Which, 50 of our business now comes from higher growth, higher margins. As i look forward to 2018, i think it will be a better year. U. S. Investigators have detected software in mercedes cars which may have been used for the sole purpose of passing diesel emissions tests. A spokesperson for daimler said the documents have selectively and released to harm daimler and its employees. If the matter result in charges, it would be another blow to the german car industry in the u. S. Anglo america platinum has declared its first dividend in six years. The Worlds Largest producer of platinum will play will pay a dividend of 3. 49 rand a share. Operational improvements and cost cutting measures helped the company more than double annual profits from the previous year. The first marvel superhero movie with an africanamerican in the title role and a largely black cast has set records in the u. S. Like panther took 192 million over the weekend. It was also the most successful movie worldwide over the weekend. That is the Bloomberg Business flash. Francine lets talk central banks. It is a big week for the fed. The central bank added the word further twice to their january statements. Investors may learn if that was a hint that the central bank is debating raising rates more than three times for 2018. Friday brings the publication, the blueprint for jay powells testimony in congress. What should the path be . And former italian Prime Minister mario monti are both still with me. Thank you for sticking around. Concernsok at the main for the fed right now, are they following the markets too much . I think probably yes. You can never be certain. I think it is time, because the economy is doing well. There is some hidden unemployment, but i dont think my entire policy will affect that very much. Raising rates will affect mainly Financial Markets and inflation expectations. It would be a good policy. Francine is the u. S. Economy overheating . I dont think it is overheating. There will be bottlenecks developing and inflation coming. Surprising is that there isnt more Wage Inflation and price inflation, which is saying that maybe that hidden unemployment, or maybe the openness of the economy, are holding down inflationary pressures. Francine we are about two weeks from the italian election. Are you worried that all this ultracheap Monetary Policy has taken away the risks in italy and in italian politics . To some extent, yes. Smartb made an extremely Monetary Policy, and president draghi has been very smart in mustering the support for qe. Believe the phasing out would be rather quicker than slower. Thesome of the reasons that professor mentioned, but also for the impact in european countries, in italy, a very accommodating Monetary Policy has on the perception of the need to act on economic policy. Factorse that among the which explain why the electoral issued so literally and irresponsibly, one of the reason is that there is no feeling of pressure whatsoever. Francine what would reality look like . Is there a real danger that reforms will be lagging with whoever becomes the next Prime Minister . There are a lot of parties offering tax cuts. How do you fund tax cuts . A positive to be put on record is that no party, populist or not, has any longer euro,ea of leaving the calling a referendum to leave the euro. Issuance ofhe costly promises is virtually limitless. But what will happen . Im not too concerned that these promises will be honored. Be the explanation on the parties which have promised so much the day they have to cut down on promises . The culprit will be europe, because european constraints will not allow them to pull the lever. This is the Traditional Division of jobs between National Politics and he you politics, except that at every round of this game, the gap between the domestic Public Opinion in europe grows. In may 2019ill have the european elections for the parliament, i will not rule out that the settling down of eclectic ideas about leaving the againetc. , might come up with the populist parties. Then of course the discussion will have to be about europe. Francine professor, do you worry about this new wave of antieurope sentiment being serviced by, i dont know if you want to call it a mismanagement of electoral promises . In some sense, you are always sentimentout antie u. I absolutely agree that Monetary Policy has been exceptionally good during the crisis, and now mario draghi handled it very well. Faster sure that a tapering down or selling the. Ssets off again is a good idea i would like to see it better established, especially with the new elections. Greece is about to exit the memorandum at last. To see all those political movements settle down before mario draghi comes up and back tots now go normal operations with conventional instruments. About italy. Really needs to reform further if it is going to be up there and drive the European Union forward, along with germany and france. Im very optimistic about macron. I liked what i heard about the future of europe. It would be good if italy had a strong Prime Minister with a good strong government. Unfortunately, doesnt look like it is going to happen. That is a worry. Francine thank you both. We will talk about brexit next. Christopher and mario monti. Up next, planning the divorce. Details are starting to emerge about what brexit will look like. This is bloomberg. This is bloomberg surveillance. Im francine lacqua. We are back with mario monti and christopher. First, lets get to the bloomberg first word news. Nejra President Donald Trump criticized the fbi, democrats, Robert Muellers investigation, and his own National Security advisor over russias efforts to sway the u. S. Election. Hours,g 14 times in 24 trump focused on defending his victory and insisting neither he nor his campaign colluded with the effort. The l. A. Times is reporting that rick gates, a former Trump Campaign aide, has agreed to plead guilty and cooperate with Robert Mueller. Japanese exports and imports both registered strong gains in january. Overseas shipments rose 12. 2 while imports grew 7. 9 . The increase resulted in the first Monthly Trade deficit in eight months. Eurozone ministers vote today to replace ecb Vice President vitor constancio. se head of Latvia Central Bank has been detained by the countrys anticorruption bureau. There are calls for the governor to step aside. His lawyer says he considers the move clearly illegal. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. I nejra cehic. This is bloomberg. Francine theresa may and her cabinet are preparing to retreat to the countryside. Ahead of thursdays away day, it is starting to become clearer what the Prime Minister wants the divorce to look like. The idea of cherry picking has come to the fore again. The Prime Minister made it clear she wants to stay very close to the union in some areas while breaking free and others. Joining us now for more, our brexit editor, mario monti, and chris still with us. When you look at first of all, congratulations on a great story which was published about eight hours ago. Go through simple terms, what we know and dont know about brexit. You arethe only thing certain about at the moment . What we are certain about at the moment is that the cabinet is still divided. They seem to be coming together on a few issues. It is becoming clear that they want to stay pretty much aligned with the e. U. Even Boris Johnson said when it came to vacuum cleaners and hairdryers, they may want to stay close to you regulations. What has become cle