Meeting. Wantsitish Prime Minister a strong relationship with President Trump, when she first meets with him later today. She emphasized to the United Kingdom that she hopes to pursue trade talks with the u. S. In the coming months. Prime minister may a new trade deal must work from both sides and serve our national interests. It must help to grow our respective economies and provide the high skilled, high paying jobs for the future for working people across the u. K. And america. Jon a core mandy moores and to guy, is bloombergs johnson. What is coming up and who needs to get the most out of this meeting . Guy in some ways, they both need to get a lot out of this meeting. Donald trump had an interesting time in the last 24 hours in relation to mexico. It would be nice for the white house to talk about a positive relationship when it comes to trade. Maybe he is able to achieve that with this meeting with the british by minister. From the u. K. s point of view, President Trump may be theresa mays trump card. Ismay give her a card that easy to play when it comes to european negotiations. There is a lot on the table here, jon, but what is interesting is, how much can they get done here . Remember, the u. K. Is still a member of the e. U. We do not even have a commerce secretary yet. Jon what interests me from the speech from Prime Minister may was not just the spatial relationship with the u. S. And the United Kingdom, but she really talked about International Order and the role that britain plays in that. It is not all fun and games, about trade, it is about diplomacy as well. Talking will be about what is happening with russia, with the global architecture, nato a big part of that discussion. The meeting is about trade and also about security, and how these two nations are going to Work TogetherGoing Forward. Remember as well, the president will be speaking to Vladimir Putin tomorrow, so theresa may has an opportunity. In some ways, the u. K. Is an outlier in terms of having a more hostile relationship with moscow right now. It will be interesting. Signal iss going to that this is a relationship that can go forward and strongly. Leaning on a little bit of reaganthatcher, here is what she had to say on that subject. Prime minister may when it comes to russia, it is wise to turn to the example of president reagan, who, during his negotiations with mikhail gorbachev, used to abide by the adage trust but verify. [applause] Prime Minister may with president putin, my advice is to engage but beware. Chemistry is going to be impact here. It is fascinating to see how they are going to fit together. The british Prime Minister talked about maybe opposites attracting. We will see how that works later on. Fascinating is not she is notry, meeting the 45th president of the United States, she is meeting the first ceo of the united rates. She says there will be oneonone deals, and if they do not treat us fairly, we will send them a notice of termination. Donald trump says there will be oneonone deals, and if they do not treat us fairly, we will send them a notice of termination. You now have a ceo in the white house who will try to cut costs. On0day termination period trade deals . The profoundone of ways that he is not like ronald reagan. It sounds like walmart. It is a very different approach. We have never seen that in a president. Jon we wonder how difficult this will be for Prime Minister may because she is not dealing with a typical politician. Shes meeting a businessman. Guy she has already laid the groundwork. Remember, Boris Johnson has already been here. Her closest advisers have laid the groundwork for that. When it comes to the mexican situation, may be can take advantage of that. Maybe there is an opportunity to allow the president to appear president ial. Maybe there is an opportunity to allow him to finish the week off on a good note. Maybe there is an opportunity for the u. K. A seniornt to bring in security strategist to rbc capital. What is policy and what is theater . How do you interpret it . That is one of the reasons we are not seeing currencies react more. If you look at the mexican peso, it has been trading in wide ranges, pushing new highs in dollarmex. There is a lot of talk but very little david what does an investor do . Do you sit on the sideline and we for something concrete to happen . Elsa there is a lot of positioning already. A lot of positioning in the pound as well. People are waiting to see something more concrete coming out of this administration, with respect to mexico and with respect to the u. K. Alix volatility has not picked up that much. It has picked up a little bit but it is not around the record highs. You would think if we are waiting for the markets to interpret and understand tweets, volatility would be picking up. Elsa we are trading within well contained ranges. We have to sit on the sidelines and see how this will play out before taking big positions in either direction. The markets together with diplomacy is the market impacted if she gets a stronger hand that she can come back to europe with and take negotiations through the spring and the next two years . You would have thought that in theory it would continue to go along those lines. But if there is a chemistry here, if there is a meeting of theresaat will allow may to have a slightly struck her hands and you saw was a french finance minister said overnight he said this is nothing. Maybe that suggest there is no sense about this on the continent of europe. But maybe if she goes too far, there could be the other effect, that the european position has not stopped. It is hard to read. David she gave a very nice speech in which she said we are not closing down from europe, we are opening up to the world. This could be a concrete action if they come up with some specific talk. The first concrete action to say that maybe the theory works. Guy that is the idea that certainly never 10 is going to be pursuing, that we are open to trade with the world. Here is a massive trading partner in the form of the United States, being put to the front of the queue. From a political point of view, this will be a huge success. How do you deal with gm food . Agriculture will be a major problem. The Trump Administration has said that they could get a deal done in a week, but only on favorable terms. We are a long way away from that. And the chancellor, philip hammond, in brussels this morning, said the u. K. Will continue to speak by the rules. Is a startingis point, but it could be an important one. What doe question is, you feel like President Trump will ask concession wise . If theresa may wants to put something in relatively concrete to the e. U. , what might he have to get from her . Elsa i do not think we will get that much concrete today. But personal chemistry is the most we can hope for from todays meeting or that should be apparent in the press conference. Apart from that, trade deals do not take a week to negotiate. They take many years to negotiate, unless one side is willing to give up everything. It is clear that with the u. K. Health services, Financial Services there are many issues. Picking up with personal chemistry, the first thing the president elected was send out a tweet of who the ambassador is. Will there be discussion about nigel farage . Guy i would not expect that, david, to be honest. I think she is going to want to keep this very professional, but try and develop that kind of personal relationship that i was talking about. How do you do that . We have already seen President Trump put the bust of churchill back into the oval office. That is a significant signal. He has already talked about the thatcherreagan relationship. How does she play to that . All of these things would have tried to workave out how to make that relationship work. On paper, these two people do they do note look like they are going to stick together any way like reagan and thatcher did. Jon how was travel at Heathrow Airport yesterday . Guy i am going to take the fifth on that one. David you are in washington, so you get to do that. That is good, guy. Guy johnson, thank you for joining us from washington. Coming up at 1 00 p. M. Eastern time today, President Trump holds a joint News Conference with Prime Minister theresa may. Coming up on this program, it is prime time in washington, d. C. Theresa may might be the first world leader to meet President Trump at the white house, but president nieto will not be the second. Afterceled his trip discussion about the wall. This is bloomberg. Jon from new york city, this is bloomberg daybreak. I am jonathan ferro. Futures largely positive on the dow through much of the morning, stable on the s p 500. A new record on the dow just yesterday. We are heading for a week of gains. Heading for a week of losses on the market. It would be a threeweek retreat, the first since march of last year. Dollar strength just coming back a little bit. Treasuries going off two basis points on the treasury yield. 2. 52. David . David tensions between the United States and mexico grew yesterday when sean spicer suggested that the u. S. Might pay for the wall between the u. S. And mexico with tariffs. It is a practice that 160 other countries feel right now our country pass policy is to tax exports. By doing it that way, we can do 10 billion a year and easily pay for the wall. David this cames on the heels of the trade deficit with mexico. It is not quite as simple as all that, as this chart shows. What has really happened is that u. S. Exports have risen dramatically over the years. But so have exports from the United States to mexico. So it is a twoway street. The yellow one in the middle has remained relatively constant. The cochief Investment Officer of Capital Management joins us. Talk about this relationship between the United States and mexico. The border goes both ways right now. If you shut it down, it will shut down both ways. Diego mexico is the Third Largest trading partner, half 1 trillion. People are forgetting the fact that the u. S. , there are 6 million u. S. Jobs exporting things to mexico. A million economists just worked out what a 20 tariff actually meant. Toonder if investors went buy up a load of pesos yesterday. Diego they did. We would argue that in a regular tariff would be more than absorbed already by current prices. Alix meaning that . That should be fine. The market seems to be predicting i do not know what kind of worstcase you have the worst possible outcome out of the election in mexico next year. The elsa, is that what currency market is telling you, too . Elsa we have a fair value range 2160 221. 60to we see the potential to break to new highs based on the fact that there is a lot of headline risk and you could seen a more aggressive tone from both sides of the border. Like you said at the start of the segment. This is an important trade relation, but it is not clear that the administration can deal with that at the moment. David one thing that is not clear is how much is real. Is this working in President Trumps advantage . He can continue with negotiations or his stance. He is throwing a lot of things out like you might in a negotiation. In International Relations it is different. It is not that you have only one set of things to negotiate. Why would you single out mexico . At the end of the day, you have 500 billion of trade, with the trade situation with canada and china. You have a billion dollars with japan and germany. So why mexico just because you want to pay for the wall . It does not add up. At the end of the day, it makes sense from a politics standpoint at some point in time you have to have a coherent International Trade policy. Jon i am trying to understand how you can be an investor in this environment and be successful. If you ignore the soundbites and focus on policy, you can successfully invest. The day. Stronger on i want to understand, if we get more of these dislocations in the market and you look at mexico, what assets are you looking at the on the currency itself . Diego in general, we think that local bonds in pesos might be the best nearterm opportunity, because that is a sector that is affected the most. One of the things that we have noticed is, despite the bad headlines, the peso has not weakened further. It feels that the decisions are already varied. It is not that you can get worse, but we think most of the bad outcomes have been priced in. Alix thank you so much. Ferro. Gnos and diego taking on some risk in mexico. Coming up, a cloudy outlook for big names in tech. More on this next. This is bloomberg. Jon from new york, this is bloomberg daybreak americas. European equity is treading water in london. 02 . Ax retreats by. 2 . Y 0 yesterday we had a sevenyear awkward a sevenyear auction of u. S. Treasuries. A little bit of a selloff has been stabilized over the last couple of days. Rate raised to 1. 2536. That wraps up things across assets. Lets cross over to alix steel. Alix we want to start with ubs having a really bad day, offwhite by over 3 . Its worst day and about five months, the lowest level of the year. Ubs Money Management units saw a decline in the quarter, the Third Straight quarter of declining margins in Wealth Management. We will hear from the ceo in the next hour. It is an interesting story when it comes to alphabet. The headline number rattled markets a bit. But remember, google hit a record high earlier this week, and there are huge numbers coming out of the company. Revenue growing over 20 for the Third Straight quarter. This company is 550 billion. It is extremely difficult to get that kind of growth when you have that kind of market cap. You had a lot of money coming into the Cloud Computing business as well. On to the u. K. For some mergers. Had tesco and burgers tesco and booker. This deal valued at 4. 6 billion, a 12 premium to booker s close yesterday. The deal could face potential antitrust scrutiny. But it may surprise many analysts as well. No one had expected Something Like this, but now we have to turn to regulators to see what we are going to get from them. Lets get an update on what is making headlines outside the Business World. In the chandra is here with first word news. Emma theresa may becomes the first foreign leader to meet President Trump at the white house. Yesterday she embraced trump as a friend and ally but cautioned him not to turn his back on longestablished political values and global institutions. She said they can lead together again in the world. Coming up at 1 00 p. M. Eastern time, trump and may hold a joint press conference. We will bring you that live on bloomberg. Vladimir putin is set to speak with u. S. President donald trump iphone over the weekend. It is set for tomorrow. He congratulated trump after his victory shortly after the election, but they have not spoken since then. The kremlin has applauded to mend ties with moscow. It is said that concrete is a potent source of greenhouse gas, and the wall will mean a loss of it a lot of it. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more i am emmaountries, chandra. This is bloomberg. Jon . York, moreew bloomberg next. Jon from new york, this is bloomberg daybreak. I am jonathan ferro. Signal may be others stretching a little bit higher. Kickrday the s p 500 did 2300 points higher, then we had a marginal retreat down. Look at the currency pair. It is the cable rate, 1. 2551. What the meeting today will say about dollarsterling strength, and what Prime Minister may can do about it. Alix high expectations. Primetime in bc and opposites attract as theresa may heads to the white house to pitch a trade deal with President Trump in hopes of breaking groundwork for a prose brexit that for a postbrexit britain. The trade war threatens to spoil decorative Economic Cooperation. The u. S. Will report fourthquarter gdp in one hour from now as economists predict a slowdown in growth, expecting a wider trade gap in moderate Consumer Spending. That is what you need to know. Jon . Jon shares of ubs in switzerland down as the Company Reported 15. 2 billion in the Fourth Quarter. The ceo painted the more popular picture. Manus cranny spoke with him earlier and asked about what he considers a success for the bank. Is thesuccess investments we have been making in the last couple of years to rebalance our business and ittle bit more toward the u. S. It is paying off. If you look at our business in general, in equities we are having a strong performance. When you look also at more to sustain this business. Manus everybody is looking at america. There could be deals in the offing where you look at m a. Where do you stand on Wealth Management . Where would you be content to shift gears from where you are in the usa . Losing 150e were million pretax. 1. 25ear we posted billion pretax in the u. S. We are very focused on growing organically, but of course the time of consolidation in our industry is starting. It is almost inevitable to address both overcapacity and in some cases profitability issues.