Planning to withhold billions in payments if that you does not play ball on trade. Itare waiting for the latest is bce earnings under the outgoing ceo. We will bring you the numbers and analysis, this hour. Ael signs a gas as port export deal with egypt. It is 8 00 a. M. Across the emirates and 4 00 a. M. In london. I am yousef gamal eldin in dubai. China has yet to come back online, but again, asian equities taking their cues from what was a slightly weaker lets run you through the Key Highlights in these markets. Gmm is the key function on your bloomberg. Linesleins being de being led by the japanese nikkei. Profittaking hitting electronics and automakers specifically and weakness coming through here. The philippines and south korea. Were looking at a backdrop here of a slightly stronger u. S. Dollar playing out in the Foreign Exchange column, the. 2 5 index short of higher. A bit of downward pressure on the norwegian krone. 1 at 62. 29 per barrel. Opecore comments from the secretarygeneral, he says there is continued growth he is seeing this year. There is optimism that opec nonopec can keep the shares. Morgan stanley says the u. S. Tariffs will hit china aluminum over steel. 7 . Ore up other key asset classes. Ahead of the key issuances in the united states, gold. Downside pressure, down. 4 . Through. Eakness coming we will expand on that conversation shortly. U. S. 10 year, this is key. We keep crawling towards the 3 mark. Treasury yield curve flattening after the u. S. Holiday coming back online. S p 500 futures currently called slightly lower. Lets check in on the first word world, toaround the haslinda amin. Maysda yousef, theresa team with holding of pounds in brexit payments if the e. U. Does not give the u. K. The trade deal at once. Whilst the move is not the option, it could be necessary in case that you tries to raonic on ge on a trade deal. Mark carney says he is already bracing for the you ks rental crisis wealth u. K. s crisis. He is planning for Bank Failures providing extra liquidity and levels. Higher capital carney says accepting the crisis will happen is the best way to prepare for it. The head of opec says the rebalancing of the oil market is gaining traction. Cartel, russia, and other producers are looking at ways to continue cooperation later this year. He does not want a return to the market volatility and downturn we experience between 2014 and 2016. Deutsche bank is said to be eliminating jobs around the world to keep a lid on expenses. We are told to hundred 50 positions have gone. The number could top 500, trading. With bonuses pushed businesses into the red. The lot jim Prime Minister says he will try to prevent Ecb Governing Council member prince of its rimsovich from returning to his post. He has led the lot fee and centralbank since 2001 but faces suspension from his job as a security measure following his detention. He rejects the allegations. Living innials advanced economies, the boom has turned to bust. According to a report, people in householdy 30s have incomes 4 lower than members of the preceding generation at the same age. The think tank says the financial crisis has held millennials back. Global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. I am haslinda amin. This is bloomberg. Betty yousef lets cross to some highly anticipated yousef lets cross to some highly anticipated earnings from hsbc. Billion. Pretax of 21 the estimate was for 21. 57 billion. A marginal miss. That is your key number. Bear in mind that 48 of analysts have changed their price target. Looking at the bloomberg realtime insights, i mean, analysts were relatively modestly position on this. 3. 5 was your rating on this. Some of the comments coming through from gulliver, good results. It demonstrates strength and the yeartial for hsbc fiscal that is in line with estimates ahead of the announcement. Contextt more on a lot of these numbers with stephen engle. Later on in the program, we will be speaking with the hsbc finance director. He is going to be speaking to bloomberg at 6 00 a. M. London time. Hsbc with the latest fourthquarter numbers, so what exactly have analysts been telling you . Stephen i mean, these are pretty much in line. You are right about the adjusted pretax number. Just a little bit below forecast, but a fairly good set of numbers for ceo stuart store double or Stuart Gulliver. Takeovering will take as groups your tomorrow. A lot of this news is coming across the bloomberg terminal. This. Ntioned i will also mention that the dividend coming in at . 21 per share is what we were expecting. Your you mentioned that one ratio of 14. 5. That is above the banks own targets of 12 to 14 , the buffer required for the bank to have, and one reason some analysts are optimistic that they will do continue to buy back is because they are well above their own target on tier at 14. 5 percent. Since august of 2016, hsbc has fought back 5. 5 billion worth of shares. There is speculation they could announce a new buy back today, however, nothing coming across the terminal as of yet. Gulliver, as i said, his final day in the office, saying these are good result and mistreating strengthen the potential of hsbc. Keep in mind as well that over the last seven years of his term, and the bulk of his duties has been downsizing the bank from pretty much the World Largest down to number seven. They have exited 18 countries and have gotten out of 100 businesses. They fired 25,000 people and really are becoming more number. They had a number of scandals, allegations of facilitating money laundering. This set of results, as Stewart Gulliver goes out the stuart ,ulliver goes out the door perhaps putting that ignominious chapter behind. At least, hsbc hope so. You forwell hold on to a second as we wait for the additional lines from hsbc. What are we going to hear in terms of potential buyback . Mixed opinions on that front. Exposures to things like steinhoff scandal is the other possible pocket of weakness, isnt it . Stephen right. Well, on the buyback, a number of analysts do expect upwards of 4 billion in possible buybacks in addition to the 5. 5 billion they have already announced since august of 2016. Bloomberg intelligence do not expect a Share Buyback in the nearterm. As far as the provisions, that is something we have to wait for in the Conference Call. I believe the Conference Call is in 3. 5 hours time local, but the steinhoff, the south african retailer that is stricken recently, hsbc, one of several banks, including u. S. Banks and european banks with expected credit losses, will like to see the provisioning might have to be as well as carillion, the failed british number two builder, collapsed with more than 2. 2 billion dollars in debt. What exposure does hsbc have to that . There are a lot of provisions left a come. The top line is saying adjusted billion. 3. 6 expected, 4. 06 billion. They have missed on the Fourth Quarter. We were expecting the Fourth Quarter to be a bit down because of seasonality factors, but the fullyear, just a little bit below the consensus estimates. Great speakingf to you this morning. That was stephen engle, and again, more color coming in. Hsbc saying it had deferred tax assets of 2. 7 billion versus four point 5 billion in 2016. No details on a potential by back, so we will keep that over the coming minutes and hours. Lets cross over to another big story we are following for you, the yield on the u. S. Twoyear. That edge tired this morning, hitting 2. 22 for the first time 6 september 2008. As the treasury purpura to auction out with the bond rout. What is the strategy looking like . It has been short bonds and running that trade from at least going back to August September time last year. He has been a great beneficiary of this massive almost one percentage point move we have seen in the u. S. 10 year, down from those levels back in september, around the twoperson level, up to around 2. 9 , heading for 3 , where we are today. Atyou have been short bonds gillespie over at allison capital, you have been feeling comfortable at the moment and good. Specifically in january, some trading that he did around some active management and some hedges, because the latter part of january, he saw a couple of things happening that prompted him to make the conclusion that we are in for some risk shakeout. He was expecting equities to get hit in the selloff, which of course proved to be relatively prescient given the selloff we had in equities. And his institutional fund, which is continuing to attract money down here in sydney, is up about 6. 9 from december. The retail funds, just a little bit less than that, going since july. Clearly, if you had been on the right side of that short bonds trade like he had, youre feeling pretty good at the moment. Yousef great to have you on the program, adam haigh, live from sydney. Lets bring in gavin harry, managing director at perry global group. As we look at this from the neverending, this conversation around where u. S. Bond yields are headed, which side of the fence are you on, and why . Gavin in the shortterm, i think that once we get to the 3 level for the 10 year, you will see buying come out. I mean, its effectively one percentage point above the s p 500 yield. In the short in from, i think youll see some buying come out. I do agree with the comments in relation to the bond market. Goldman sachs coming out and calling for a 3. 25 on the 10 year by the end of the year. Yousef we put up a very interesting chart, gavin, to show some of the positioning. Bang two sides by speculators. On thes been widening u. S. 10 year yield specifically. What is going to be the key driver of u. S. 10 year Going Forward then . Is it going to be the weight of the uncertainty around u. S. Policy when it comes to trade . Will it be u. S. Deficits, the fed . What are you looking out for . It is underlying Monetary Policy in the u. S. We have in you had coming in as chairman, but in our view, we still think its fairly dovish at this stage. One of the main aspects is the fed has got a dual mandate, and they have been lingering the market in relation to the full employment side of their policy. You have been iraqi talking ckiut been a key bena talking about it. Even yellen has been moving the goalposts, has been moving the goalposts for unemployment. While we are at record levels here, we are looking for inflationary the good pulltion, the demand push, on the inflation side of things. Comeally need to see that through. We are not seeing wage growth at the moment. We think it will be fairly dovish. We agree that while the 3 level may see buying come into the bonds, by the end of the year, they have got it all right. Yousef i was looking through your research, and we have had a lot of people on this program that have become increasingly dollar bears, but you are not necessarily one of them. You dont think that there is a lot more downside from this path onwards . No, just gavin from an historic point of view. If you look at the broad trade weighted index for the u. S. Dollar, which we think the fed keeps an eye on for a longer aspect, the u. S. Dollar as opposed to the bloomberg dollar index, a smaller selective basket against across the u. S. Dollar, we are down at levels we have not seen since the western credit crisis or the oil crisis. Does not see much the fed wants the dollar down at these levels. It is not so much the fed but in relation to how Monetary Policy is moved. , when we see low levels like this for the u. S. Dollar, basis,oad trade weighted we dont see this for a long period of time. Yousef all right, gavin, we will be back with you shortly. Gavin parry is sticking around. Lets get you a bit of a preview of whats coming up. Delivers goodbye. How will hsbc fare . Outside there is a headquarters with the very latest. Again, also, note on protectionism. As we speak, we will break those down for you. Theresa mays brexit backup plan. We will discuss that, next. This is bloomberg. A closewe are keeping eye on the latest statements from hsbc. Additional details coming through. Lets start out with comments on the global economy. Hsbc expects Major Economies to show reasonable growth. Hsbc talking about the protectionism threat and international tensions. They say this is a key risk for them, and also the Share Buyback. Im looking out the analysts have been saying ahead of this announcement. They were estimating 4 billion. Hsbc saying they are going ahead. As and whenk, appropriate. At the moment, no confirmation of any Share Buybacks as it stands. A quick reminder that you can they across the latest figures and Detailed Analysis from our global team with tliv function. I brought this up on my bloomberg as well. Pulling coverage and input from a lot of our reporters around the world. Key quotes here from gulliver past statement. You have got the Key Highlights. There was the pretax adjusted missed estimates and the fiscal year pretax coming in at 17. 2 billion. Also, i reminder that we will be fleshing out this conversation with hsbc finance director the man himself. Stay tuned for that chat. Lets stay with, well, another story that is currently ranked quite high in the global conversation. Theresa may, her team is said to have secret plans to withhold billions of pounds of brexit payments if the you doesnt give the the e. U. Doesnt give the u. K. The trade deal it wants. We are told some in her Administration Believe it could be necessary in case that you the sites to go back in terms of commitments to a future free trade deal. He has won the backing of the euro area finance minister to replacements Vitor Constancio at the next European Central bank vice president. Executivehim on the board after a sixyear absence and comes at a crucial time for the ecb as it prepares to unwind unprecedented monetary stimulus after a decade of controversial decisions. Loss to consider. Gavin parry is still with us. Lets start with the conversation around brexit. This is according to people familiar with the matter, but the fact that they would even contemplate a scenario like that , look like they are preparing for the worst. Is a bit of a mexican standoff. I think it does impact, to a degree, the comments you were making about the curtailing of the qe program from the ecb. That is something that is almost slated. They are telegraphing that to the market quite well. We need to look at the impact of that on the euro. Going back to the u. S. Dollar comment, you are mentioning what we were talking about earlier, what the effect is for the crossroads as well. To ask,nother factor where we get the feeling that you are going to see the fed move. Aspect, but its going to be again off the back. F the ecb movements obviously, moving through some had a positive Monetary Policy stance. Little bitle a weaker as we speak. Looking ahead to a major speak from speech from theresa may. She is planning to set out her goals for how this is going to fall into place. What kind of base case are you betting on, gavin . Gavin it does seem a little is going toritain stand up and start demanding, given the fact that it seems like they need to have consensus in the e. U. Side of things to get the deal done. I guess we have to wait and see exactly what they are going to pull out in relation to the negotiations. A bit of ain is in different situation in relation to the Monetary Policy given the inflationary aspects, but again, with the e. U. As well, places like germany are seeing inflation, given we have had the benefit of a lower euro recently. Looks like their exports. They both are yousef movements. We have got a new movements. Yousef we have got a new face at the European Central bank. It is a powerful post. Could we see a bit of a shift in ecb policy over the next year or two . Adam maybe, gavin maybe. We have got situations like greece at the moment, and obviously spain. So i think that he is probably not going to focus too much on that. The broader aspect, as i mentioned, a place like germany facing the big, inflationary pressure. It is very much a balancing act for some of the other Member States that probably could not handle the tighter monetary situation. Yousef gavin, great having you on the program. The gavin parry, appreciate your time. A preview of whats up next. We will check in on how some of the markets in the gulf have been faring so far this week, and what we can expect going into the later part of today. This is bloomberg. Yousef lets get you up to speed with how some of these equity markets in the region have fared. It was a mixed picture across the board, mostly higher in some of the key benchmarks. The dubai index up. 2 . Volumes relatively in line with the regional gain. Gcc, indexes lower. Saudi arabia was an interesting story, up. 25 . Some of the key sectors performing. Qatar up. 3 . Egypt, also an interesting story, as the rate cut tailwind continues. Yet she has upgraded some of their calls. Saudi arabia, overweight from autral from the msci on potential inclusion. Lets get you a preview of what is going to come on the show. We will talk about widening out the conversation around egypt. Israel signing a gas export deal with egypt changed the relationship between the former regional rivals. This is bloomberg. Show me the olympic winter games like ive never seen before. Xfinity x1, yeah, i always know the scor. Triple corks in 4k. Lookin so sick. Stream live on every screen, every win, every trick. 2000 hours of coverage, get your mind blown. 50 olympic channels, yup, youre in the zone. And if theres something that you want to see, pick up that voice remote and just say show me. Experience nbcuniversals coverage of the olympic winter games like never before with xfinity. Proud partner of team usa. Yousef its 11 30 p. M. In new york, 8 30 in the morning in dubai, and you are looking at a live shot of the finance center in downtown dubai. A bloomberg dollar index that is a little bit stronger. There are clouds building in the background, as you can see. Au. S. Equity futures quite bit mixed, lower on the s p 500. Lets check in on the first word headlines from around the world. Haslinda amin. Hsbc reported adjus